Will the Govt take a "U" Turn ?

From 2001 to 2024 October, almost 23 + Years, the ISI License was mandatory for every packaged drinking & packaged natural mineral water plant. Then in Oct '24 the GOI through its major Food Business Regulator, the FSSAI came out with it s decision to realse the "mandatory" tag about the BIS and made it optional.Since then there has been quite a confusion within the industry professionals about many issues, mainly the lab testing & the quality compliances.

A Sudden Development !

On 13th October ( I don't know why October is famous 😁) the UP Govt FSDA came out with a decision to make the ISI compulsory again for the Bottled Water Units ). 

How can it take such a decision to ignore FSSAI's nation-wide decision ?

FSSAI sets up standards, but the enforcement & implementing authority is the FSDA in U.P. which can take decisions, in interest of public health.

What is the basis of the decision ?

811 Units were inspected to find out :-

• Violation of Hygiene & Sanitation Standards as per Schedule-4 of the FSSAI Licensing & Registration Standards.
• Major Infrastructural deficiancies were found like faulty designs, absense of UV & Ozonation, No Test-Record Systems etc.
• No systematic Water Test Reports S.O.P. 
• Manual Operated Systems.
• During the enforcement action, 660 samples were collected from these manufacturing units; out of these, 176 samples were found harmful to health (unsafe)- meaning they contained E. coli bacteria, coliform bacteria, yeast, and mould, showing improper water purification and bad storage conditions of purified water in microbiological testing and 337 samples were declared sub-standard meaning they had lower-than-normal levels of minerals like calcium and magnesium, showing poor purification quality , particularly the "Added Minerals" Section. Based on this, 55 units license was suspended , whereas those asked to close down, were those whose samples are found unsafe.
• It was particularly observed that post the ISI Mandatory clause withdrawl, there was a huge increase in the number of Packaged Drinking Water Units, and a mass violation of hygienic standards, resulting into almost 25% of units producing unsafe drinking water. This is happening, even if the FSSAI has made the Packaged Drinking Water as "High-Risk" Product. So, clearly it has happened as a result of the ISI mandatory withdrawl, nothing else.

Dr Roshan Jacob, the comissioner has ordered to implement the following Directives with immediate effect :-

1. Any new Unit will need an ISI License, before it becomes operational. Must.
2. Existing Units will need to get ISI till 31st March 2027. If they don't, their licenses will be suspended till they get ISI & production will be stopped.
3. The "Central" license holders are also expected to follow these guidelines.

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Some Basic Confusion in Minds of Water Plant Owners

• Will this be implemented by more states now ?
• As with recent reformation, Units having Turnover between 1.5 Cr to 50 CR ( Most Water Units come under this ) will require "State" License & not  "Central" License, the State FDA's will have authority to make a compulsion like this.
• Will both compliances be made compulsory at a time : the ISI by BIS and "High-Risk" by the FSSAI ? 
  
• This may increase expenses & the License Raaz.
• Survival becomes even tougher.

Water ATMS - Is the Govt Blind ?

Recently, there was a news that the Delhi Govt is setting up 250 Water ATMs across the city. With a huge budget obviusly. But what about its maintenance ? Is any agency appinted to take care of these machines ? The vendor who's supplying these machines is usually appointed through the tender system. Is he held responsible ? Will his performance be measured against regularly maintaining and submitting reports to authorities ?

There are enough evidences which can easily prove that these govt funded projects alone won't work. I know many business owners who don't do the govt work, just because of the heavy corruption in the tendering system. This is also not different. 

Recently, in a news, I read that, In Amritsar, nearly 20 machines are observed to be not functining at all. There are many cases like this about the defunct machines. Those working well, do they come into picture ? We've published a story on our YouTube channel, which is about a privately run ATM. 

The govt job doesn't end at making news from it but completing the loop.

Calculating exact need, appointing suitable vendors and payment will be on three performance basis. 

How can there be different vendors for machine supply, and running them ? If there are, their payment should be linked to the proof of the value delivered through them.

Machines supplied through CSR is also the same story. Recently I saw this is the state of CSR supplied machines with a noble cause :

What you see above is a bottle recycling unit installed on Platform no 1 of Talegaon Railway Station. 

And this one is from Swargate State public bus station in Pune. This was inaugurated very recently. But absolutely no care about maintaining.

Just news, no value.

Working Capital :- Please Spend Time on This

Enormous number of businesses fail here : Not knowing Finance. And believe me, it's not that complex as we think. I too, am not a Finance fella. I'm an engineer.

The time we think we should spend on tech things, if we spend equal time on Finance, the number of failed businesses will definitely reduce : I assure.

Fact about entrepreneurs :-

• They know they would be needing Money to Buy Machinery & Equipment
• Many of them are also smart enough to raise funding
• Many of them knows the Govt Schemes
• They also know they require Working Capital

But that doesn't mean they know Finance. It's more a Monitoring/Controlling thing, than knowing. And this needs time to invest in the game.

I see entrepreneurs offload this work to the "Finance" guy and escape the dirty ( not exactly ) work. But the work, which they think "Dirty" is the real work a Business Owner needs to care about. 

Why is this "Escape" tendency ?

One very simple reason is that we don't teach/talk enough about Finance in homes/schools/colleges. And it's often confused with "Accounts". It's more record keeping; however finance is to deal with Decisions on the basis of some important metrics.

Coming Back to Working Capital

Forget all else, but at least understand this, as it is the thing which will make/break your business. Don't escape.

Usually I don't do much link-building here, but do read the article on our main website 

Who Decided This Price ?

Whenever anybody wants to start a new Bottling Plant, he/she has a pakka conviction in mind ... 

I have to sell at Rs.20 ( as of today 🙏 )

How have you arrived at this cost ?

If you ask this question, the answer is " Because whole market does that ". Unlike other products, the Packaged Drinking Water Price in Indian Market is Rs. 20.

It's NOT regulated 

But who says it's "the" price ? You can go below ( as Jio has done ) or you can surpass as well. It is not regulated that you SHOULD sell at Rs. 20. 

Then Why no-one dares to do that ?

Fear of Rejection :-

Everyone feels that he will be rejected. And yes, possibilities are very high. As all others : The Big 3 : Bisleri, Kinley, Aquafina charge Rs. 20. If Aquafina, Kinley couldn't dare changing it , how can I ? : That's the fear in the mind. 

Can I reverse the tradition ?

Why Not ? I remember referring to a case with Akio Morita, the SONY superman. In very initial days he reversed the tradition of increasing discounts with increased quantity. Rather he proposed different pricing for different sized lots. Some cases, more no. of lots attracted more price per lot. As it was NOT suitable to SONY. 

So, It can't be Market Driven Always

Who says, it should be 20, always ? If it can come to Rs. 15, It can also go to Rs. 25, or can also come to Rs. 12. So far the cost per bottle ( 1 Ltr ) remains at 6.25; you can always keep that as a base price, and decide your ultimate selling price.

Further Strategies can be Decided

Once this fear is removed from your mind; you can always go further and do some out of box thinking. The easiest will be not going the Distributor way, which eats up your major chunk. Anyways, this is not a place to decide the exact strategy, but to explore the possibility of deciding a different price altogether.