Bundeskartellamt issues new statement of objections to water provider Berliner Wasserbetriebe and aims for a reduction in the price of drinking water by € 292 million for the period from 2012 to 2015

Today the Bundeskartellamt has issued a second statement of objections to Berliner Wasserbetriebe (BWB) for charging abusively excessive prices for drinking water. Following BWB's comments to the first statement of objections (cf. Bundeskartellamt press release of 5 December 2011) the Bundeskartellamt conducted further extensive investigations.

The Bundeskartellamt has reached the preliminary conclusion that in 2012 the water prices in Berlin (based on the net returns per sale excluding taxes and duties) will have to be reduced by on average approx. 21 % compared with those charged in 2010 and by on average approx. 20% in the years 2013 to 2015. This means that BWB will be obliged to reduce its sales revenue for the next four years by approx. € 292 million which would directly benefit Berlin water customers.

Andreas Mundt, President of the Bundeskartellamt, stated: "Water supply is one of the last large monopolies in Germany. The proceedings against Berliner Wasserbetriebe show how important effective monitoring by the competition authorities is in this sector."

In its comments on the authority's first statement of objections of 5 December 2011, the BWB had pointed out that the water providers HamburgWasser and Stadtwerke München GmbH which the authority had used as comparable companies, had in the meantime raised their water prices by more than 6%. Consequently, new investigations were conducted at all the companies and data collected for the year 2011. The investigations revealed that HamburgWasser and Stadtwerke München did not raise but in some cases even lowered their water prices last year. In Hamburg only the statutory water extraction rate was increased, which is not relevant for the Bundeskartellamt's proceedings. The comparison drawn by the Bundeskartellamt, on the other hand, is only based on prices excluding federal state and municipal taxes and duties.

In its first statement of objections the Bundeskartellamt had considered in BWB's favour the exceptional investment which had been necessary for redeveloping the East Berlin water supply network. However, the latest investigations have now revealed that certain public subsidies for these investments had incorrectly not been indicated as a separate item from the company's own costs. This part of the costs had to be subsequently deducted in the calculation of the revenue.

As a result, the price reductions are now higher than set in the first statement of objections (at that time € 205 million for the period 2012 to 2014). This difference is partly due to the fact that lower investment costs could be acknowledged in BWB's favour. In addition, the latest investigations have revealed that in 2011 the prices charged by the comparable companies actually rose less than had been originally anticipated. On the basis of the data collected, which now also include 2011, the Bundeskartellamt intends to extend the planned price reduction for 2012 to 2014 to the year 2015.

The companies concerned have until 29 April 2012 to comment.