Walmart Used as Fig Leaf for Government Profligacy

Wednesday, May 13, 2015

Walmart, the discount store leftists love to hate, is being pilloried for the alleged sin of using up Sacramento's drinking water in the midst of California's drought. What's actually happening is reported matter-of-factly in a "news report" that is more like a inverse Internet "flame sandwich", with smears, one coming from a public relations "expert", coming before and after the "news", if you can call it that:

Sacramento sells water to a bottler, DS Services of America, at 99 cents for every 748 gallons -- the same rate as other commercial and residential customers. That water is then bottled and sold at Walmart for 88 cents per gallon, meaning that $1 of water from Sacramento turns into $658.24 for Walmart and DS Services. [ad link removed]
Translation: The government, which is selling water at artificially low prices, sells some of this to another company and Walmart buys some of that for treatment and -- not being a charity -- it re-sells it at a mark-up. Had the government not been essentially offering a heavy subsidy to Walmart's bottled water business in the first place, Walmart would surely already have sourced its bottled water elsewhere, as normal laws of supply and demand would have informed the company of the scarcity of water in that semi-arid state.

On top of this, the article reports the selling price of the water as if all of it is profit, not that making money -- the whole point of Walmart's existence -- is wrong. Part of this is profit, and part is costs, like shipping, packaging, and labeling that the store must bear. It is not hard to imagine, factoring this in, that, "[T]o find another supplier outside of California that can ... meet the needs that they have and also the needs of the consumer," won't be so easy. The chain will likely face a choice between raising its bottled water prices -- or selling it at a loss to avoid another unjust "public relations" debacle created out of thin air and slanted reporting just like this one.

In the meantime, the government, which has no business running a water utility in the first place, gets a free pass for (1) making water look cheaper than it is, and (2) selling off large amounts of it cheaply during conditions of scarcity.

-- CAV

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