"Stop! Put down that bottle! Now, read the label."
So runs the gist of today's news for the bottled water industry. On Wednesday, a congressional hearing concluded that "neither the public nor federal regulators know nearly enough about" the source of the water that Coke (NYSE: KO) bottles as "Dasani" -- or about PepsiCo's (NYSE: PEP) "Aquafina," or Dr. Pepper Snapple's (NYSE: DPS) "Deja Blue," for that matter. And so,
Congress wants the manufacturers to kindly explain just what goes into their pretty plastic bottles.
H2 + O = what?
Now granted, there may be nothing to this inquiry. So far as I can tell, Coke at least places much of the information Congress seems to want right on its website. Regardless, Congress argues that no one really knows how safe bottled water is to drink -- because contrary to public perception, there's actually less regulation of the stuff that goes into a bottle of brand-name water, than of the stuff that flows out of your garden hose. The hearing cited instances of bottled water recalls in response to arsenic, mold, and bacteria contamination as examples that suggest regulations need improvement.
Arsenic and bacteria? Yum!
If it does, then beware: While targeting purveyors of bottled water, Congress's inquiry could conceivably gather steam in the public's imagination, and perhaps raise doubts about firms hawking do-it-yourself purified water as well -- Procter & Gamble (NYSE: PG), which makes the Pur water filter, and Clorox (NYSE: CLX), maker of Brita.
So should investors be scared?
Probably not -- or at least not unless Congress uncovers actual problems with the quality of these beverages. Absent such findings, I suspect the worst that will come out of all this is that Congress requires Coke, Pepsi, et al. to submit to standardized quality testing and publish the results on their bottles.
Yet the same fools (note the lack of capitalization) who ignore the government when it certifies that tap water is safe -- who think that a pretty label means the water is cleaner -- are unlikely to change their habits just because the government reminds them: "Hey, it's just a label, folks."
Fact is, if Congress asks where the water comes from, and Coke responds: "We get it from CEO Muhtar Kent's kitchen sink," that'll probably pass regulatory muster -- so long as Coke remembers to put it on the label.
Because guess what, folks? That tap water was just fine all along.
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