Madison, Florida – It takes a smart and politically well-connected company like Nestlé to get a drought-stricken state like Florida to give it tens of millions of dollars worth of water to resell at enormous profits to its neighbors in states like the Carolinas and Georgia.
For Nestlé, finding new sources of fresh spring water and securing the right to pump the water requires political influence: the ability to secure support with high-level state and local officials. Nestlé, like other large corporations, believes residents see dollar signs when they hear a large corporation is coming to their town. They often use local residents as straw men to keep the cost of expansion cheaper, all the while extracting tax and water pumping concessions by promising good paying jobs.
No place better demonstrates how successful Nestlé’s bottled water operation has been than its major move into Florida two decades ago. One of the key targets in Florida was a tiny town near the Georgia border. Madison is a hard scramble community that combines gentility and charm with enough racial tension to remind visitors they are in the Deep South. It has few job opportunities. It is the kind of town where a single employer could dominate it by offering just a few hundred jobs: first, a sausage plant (closed in 2006) and then Nestlé (a 400-acre “eco-friendly” bottling plant).
Madison is not rich but, at its heart, it is everyone’s idea of small town America. There are lakes, churches, and a real downtown with a beautiful courthouse, town square and some wonderful old homes.
But the place Madison residents love to take visitors is about ten miles east of town. Tiny Blue Springs State Park is crystal clear, a “first magnitude spring . . .popular . . . for swimming. About 82 feet wide and 25 feet deep, the spring bubbles up into a limestone basin along the west bank of the Withlacoochee River,” according to a boastful Florida government Web site. “Scenic woodlands of mixed hardwoods and pines create a picturesque setting for picnicking, paddling, and wildlife viewing.” This amazing setting, like so many other Florida springs, seems an unlikely ground zero for what would become a nationwide water war.
The Swiss incursion of Nestlé into the State of Florida began with a covert operation in 1989. Perrier Group of America, under a new identity as Nestlé Waters North America and owned by Nestlé S.A of Switzerland, began by buying a family-owned business in Crystal Springs, Florida, called Zephyrhills. The Florida spring water now bottled by the Swiss continues to be sold as the Zephyrhills brand. That deal set a pattern for Nestlé. Despite all local objections, the Southwest Florida Water Management District, locally known as Swiftmud, a branch of the Florida Department of Environmental Protection (DEP), granted a permit to the Swiss-American group.
The public was locked out of the natural springs as a recreation site, raising a populist protest. Environmental watchdog organizations, including Save Our Springs and Friends and Citizens of Crystal Springs, opposed taking water from the spring, while the city of Tampa objected to withdrawals from its drinking water source.
After their first Florida success, Nestlé executives turned their attention to Madison’s precious Blue Springs. How the water that feeds this state park got into the hands of a huge Swiss conglomerate just as Florida faced a record drought and was in a fight with Georgia over a water shortage is the story of Florida politics, powerful lobbying and the smell of new money in a small town.
After Nestlé identified the spring as one they wanted to license, the company took a multipronged approach. They used their powerful lobby at the state and local level to carefully target water rights owners, bureaucrats, politicians, and prominent people. Nestlé, like other mega-corporations, can be ruthless about cutting off relations with influential local people once they are no longer needed. Tommy Greene, the local newspaper publisher in Madison, and an influential businessman, said, “I was hired and supposed to help them with the local government here and in Tallahassee, but as soon as they got what they wanted from Jeb Bush’s administration, Nestlé cut me off.”
In 1998 Anna Bruic, originally from Germany, and her son, Mike, owned the property and the beautiful swimming hole created by the Blue Springs. Tommy Greene had grown up with the springs as a favorite town teenage hangout. When adjoining Hamilton County closed its waste dump, the Blue Springs owners found their spring being used as a replacement. When night came, the beautiful clear waters of Blue Springs became a dumping site for illegal waste, old toilets, and even cars, according to Greene.
Mike Bruic, a U.S. Navy veteran, decided to shut down the springs at night to stop the illegal dumping. That and the $2 admission charge the Bruics initiated did not go over well. The Bruics, who lived on the property, were harassed and even threatened. One afternoon Mike was canoeing the adjoining river and surveying the source of the Blue Springs when he suddenly came under attack from a speed boat with four young men on it. They threw bottles and rocks at him and then pointed a shotgun toward him. They kept coming at him as threats were exchanged.
The confrontation escalated when Bruic got to shore and obtained what turned out to be an illegal automatic weapon from his truck. The shotgun-bearing attackers realized this was not an even match with what amounted to a machine gun. But when the local police arrived and the Bruic family tried to turn over the four attackers, the police arrested Mike Bruic instead, on federal charges of possession of an illegal machine gun.
Anna Bruic was desperate and pleaded with Madison Judge Wetzel Blair for help. Blair called his friend, publisher Tommy Greene, and told him of Mrs. Bruic’s problem. Greene informed Anna that the spring was worth a lot of money and could pay for any legal expenses the family had over the federal gun charges. Greene told DCBureau.org that “when I met with her she was crying that she didn’t have any money. I told her she owned half a billion gallons of water a day and that could be big money. She was a tree hugger type. So we made a deal. She got a share, her son got a share, and I got a share. The last share would go to Madison County. I went down and arranged for a few hundred dollars to get the permit, which allowed ten percent of the flowing water or 1.92 million gallons. We dug two 12-inch wells. The income would have been at a penny a gallon – $19,200 a day to each shareholder.” That meant each shareholder would receive about $7 million a year.
Greene said that in the days after he got the permit to pump he got up at 3:00 a.m. every morning and made calls to major water producers in Europe to get a bidding process going. He had interest from an Iranian national as well as an Italian water producer. An American from Louisiana came to meet the Bruics to sign a deal for four cents a gallon. “It was a great deal. He guaranteed the first 100,000 gallons at four cents a gallon and wanted an option on the rest. Madison County’s share was enough to eliminate all property taxes and provide a wonderful $19,200 share a day forever to me and each of the Bruics,” Greene said.
Greene arranged with his friend, former Florida Governor Claude Kirk, to successfully defend Mike Bruic on the federal gun charges. While out on the bond that Greene said he arranged, without telling Greene, Bruic contacted other water companies. To Greene’s horror, when he and the Bruics sat down to dinner with his Louisiana buyer, Mrs. Bruic got up and walked out. Then Greene heard that the Bruics wanted to buy out his interest. Events were spinning out of Greene’s control. “Something had changed, and Nestlé was behind it,” Greene said.
Greene sold his interest in the spring back to Mrs. Bruic he said with only one condition: “That Madison County gets the Blue Springs for recreational use.” But that promise was broken when the county supervisors agreed to let Anna Bruic sell her property to the State of Florida. Months later she sold 2 acres of her land and the water-bottling permit Greene had obtained to Blue Springs LLC, owned by Bill Blanchard of Tampa, who, in turn, sold the permit to Nestlé.
Nestlé bringing jobs to Madison was a tantalizing prospect. In March 2008 the St. Petersburg Times reported: “To those pushing economic development in Madison County, an international corporation wanting to build a huge manufacturing plant there was a dream come true. Since 1972, the only major manufacturing operation was a meat-packing plant operated by Winn-Dixie. Smithfield — which produces sausage, hot dogs and lunch meats — bought the plant in 2004, the same year Nestlé opened its bottling facility, promising hundreds of new jobs and an economic windfall. Rural, small towns are almost a signature for Nestlé ‘s bottling operations…”
“Jobs: That was the power Nestlé had,” Tommy Greene said.
Knowing that Greene had influence in Madison, Nestlé proposed to hire Greene as their lobbyist for the company in Tallahassee on water issues. But while Nestlé was negotiating with Tommy Greene, they also were hiring other lobbyists to work with then Governor Jeb Bush’s administration. Nestlé’s effectiveness with the Bush regime trumped Greene’s considerable influence in Madison. Once Madison County walked away, the Bush administration struck a deal with the Bruics to buy part of their property and turn it into a state park. According to Greene, with his buyer from Louisiana Mrs. Bruic and her son would have made many times over the amount the state paid for her property, not to mention his and the county’s potential profits.
Jim Stevenson, chairman of the Florida Springs Task Force, told then-Governor Jeb Bush in a meeting of the Florida Cabinet on October 10, 2000, that the 600 springs in Florida are managed by two federal agencies, three state agencies, two water management districts, eleven counties, four cities, many corporations, and private citizens. He reported that at a Florida Springs Conference, Sonny Vergara, Executive Director of the Southwest Florida Water Management District had said, “Our springs are under siege.” Leading the charge is John J. Harris, Executive VP, Chairman and CEO of Nestlé Water, the man responsible for expansion into China, the Middle East, and Africa. (Harris was named one of “the 100 most powerful executives in corporate America” in 2009 by Black Enterprise.)
The Florida Cabinet, chaired by Jeb Bush, approved a proposal that same day to acquire Anna Bruic’s land in the Florida First Magnitude Springs CARL project, “and specifically Madison Blue Spring,” to protect what Mr. Stevenson had called “a world class natural resource.” The natural resource was then turned over to Nestlé. In October 2000, Mrs. Bruic sold 38 acres to the state and Madison lost Blue Springs. The spring, which bubbles up to a limestone basin on the west bank of the Withlacoochee River, became Madison Blue Springs State Park in 2005.
Anna Bruic eventually returned to her adopted home of Canada with about $800,000 for her interest in the spring. The County of Madison lost control of Blue Springs in a series of deals that gave Nestlé control of the water despite objections by regional and state environmental experts who feared watered shortages and urged the state to reduce pumping on the permits to no more than 400,000 gallons a day. The Suwannee River Water Management District staff, worried about drought, recommended that permits be limited for the Blue Springs. In a memo obtained by the St. Petersburg Times dated Nov. 15, 2002, “the water management district staff recommended reducing the amount of water Nestlé could draw under the permit it would obtain from 1.47-million gallons a day to 400,000 a day.” The spring’s flow had been reduced from 55-million gallons day to just 34 million gallons a day. The St. Petersburg Times reported: “‘The current drought has reduced the flow of Madison Blue Springs to record lows,’ Jon Dinges, director of resource management, wrote to the water management district’s governing board. ‘The drought has become severe since the permit was issued, thus requiring a reduction of the (average daily withdrawal) to ensure resource protection.’”
But in January 2003 when it came before the regulators – all appointed by Jeb Bush – they refused to follow water staff recommendations after Nestlé threatened to reduce the size of the plant it would build in Madison if their water allotment was reduced from the Bruic allotment.
Enterprise Florida, the governor’s politically appointed business development agency supported Nestlé’s argument at the meeting. “We have been working with representatives of the company for about two months, in trying to secure 300 jobs that will be present at this facility upon build out,” Bridget Merrill of Enterprise Florida told the board. “It is with certainty that the company has to proceed.”
Jeb Bush pushed through an added perk for Nestlé. Florida gave Nestlé a tax refund of up to $1.68-million for the Madison bottling operation. The 300 jobs Nestlé promised dropped to 205 by 2007 (46 of those employees live in Georgia).
In Madison County, opposition to Nestlé was strong, but the decision was in the hands of the Board of Suwannee River Water Management District. That board, appointed and controlled by Governor Jeb Bush, granted the permit to Nestlé against the combined forces of the Environmental Alliance of North Florida (Enough), Save Our Suwannee (SOS), Florida Clean Water Network, and others. The state’s economic development organization, the corporation-friendly Enterprise Florida, Inc., publicly supported the Nestlé takeover despite the objections of water and environmental authorities in Florida.
The permit has been modified four times since it was transferred out of private hands. From the original average daily withdrawal of 1.47 million gallons, Nestlé’s water pumping allowance under Water Use Permit No. 2-98-00025 Modification 4 is now an average of 1.61 million gallons per day or 588 million gallons a year. Daily allowable averages can inch up to a maximum of two million gallons per day.
“Bottling companies are over-permitted,” says Linda Young, Madison County member of the Florida Clean Water Network. Like many citizens, Young believes water bottlers who make a profit “should be paying for it.” But when a company won a lawsuit in Texas under a state law that allowed drying a neighbor’s well, Perrier-Nestlé spokesperson Lauren Cargill stated, “If you own the land you own the water [and] you can take what you want regardless of your neighbor.”
Jim McClellan, P.R. consultant to Nestlé and a former employee of Lt. Governor Buddy McKay, points out that a bottled water plant takes little water—“about the same as two golf courses”—and that Nestlé provides 1,000 jobs in Florida. But according to State of The World 2004, a Worldwatch Institute report on progress toward a sustainable society, producing one kilogram of the plastic used in the bottles requires 17.5 kilograms of water.” The report concludes, “In terms of water use alone, much more is consumed in making the bottles than will ever go into them.” In terms of conserving water resources, several Canadian provinces have banned the bulk export of their fresh water. Florida water, however, is available to any and all users until it runs out.
Betty Johnson of Madison says, “We have to remind a few states that you don’t just go out and sink one of those gigantic 12-inch wells down just anywhere.” But she does not expect government support. “We can’t get protection from the water management district for Madison Blue Springs. That’s not going to happen as long as Nestlé’s here.”
Jennifer Tanner at the Valdosta Daily Times wrote, “Blue Spring Park in North Florida is a place frequented by Valdostans of many ages. A half-hour drive south is worth the hours of fun to be found in the cool water of the spring and the warm sun that shines through the trees.” But Tommy Greene admits that the Blue Springs, since it became a state park in 2005, is not the same deep blue pool it was when he was a young man swimming there. “It’s down by at least twenty feet.”
Some south Georgia residents are not complaining —with good reason. Many of the 200 jobs provided by the company (fewer than half the number originally promised in Madison and Lee, Florida) went to people from Valdosta, boosting their per capita income and local economy.
In Madison, Marianne Green has a cousin who got a job at the plant. But he didn’t like the mandatory 12-hour work shift, so he quit. She said, “People don’t live in a place like that to do nothing but work in a factory.”
What concerns many in Florida is the taking of a natural resource that may run out. The St. Johns River Water Management District states that groundwater supplies are now reaching their sustainable limit. The state’s water source, the Floridian aquifer, will not meet future needs, the WMD warns. Water supply utilities in the district are now required by the WMD to develop alternative water sources—such as desalination of sea water and recycling of sewage—“because many utilities are unlikely to receive district permits to take additional water supplies from groundwater,” according to WMD sources.
Florida Governor Charlie Crist proposed in his 2009-2010 budget an unprecedented response: taxing private companies that bottle state water. His plan called for a “resource severance fee” of six cents per gallon on water withdrawn strictly for bottled water sales. The funds would have been used to develop alternative water supplies, set water pollution limits (Total Maximum Daily Load as required by EPA), manage surface water and improvements and provide grants for sewage treatment. Several bills were introduced in the Florida legislature primarily to implement the proposal by eliminating bottled water’s state sales tax exemption. The sales tax is 6% (plus county sales taxes). Several legislators from towns that bottle spring water were opposed the tax. Crist’s proposed tax was not adopted.
Just two decades later, Nestlé’s first tentative foothold in America has turned into 52 manufacturing plants, six distribution centers, and 58 sales offices across this country. In their unquenchable thirst for even more water, the Swiss have been left high and dry in Wisconsin and Michigan, but not in Florida, where desperate battles for adequate supplies of clean drinking water are complicated by the convoluted politics and geographic substructure of the Sunshine State.
James Robert Daniels contributed to this story.
An excellent series on Florida’s water problems can be found in these links to the St. Petersburg Times http://www.tampabay.com/news/environment/water/article418793.ece
(DCBureau has offered Nestlé an opportunity to respond further to this series on their bottled water operations.)