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Up to half of water used in Beijing's coolers could be fake.

A source with a major supplier made the sensational claim yesterday to the Beijing Times newspaper.

The claim, made by "Liu Xiaoyun", the Beijing sales manager of a well-known bottled water brand, was verified by a number of market competitors. There are more than 200 players in the capital's barreled water market.

The main four - Wahaha, Robust, Nestle and Yanjing -dominate with 25 to 30 million barrels of the total 100 million sold in 2006, Liu said.

"There are now nearly 20,000 water delivery stations in Beijing," Liu was quoted as saying.

"In a conservative estimate, each of the four brands holds on average a monthly sales volume of 1,000 barrels. This makes an annual sales volume of at least 200 million barrels, 100 million of which are counterfeits."

The so-called fake water is either tap water or purified water of miscellaneous small brands, poured into empty barrels sealed with quality standard marks, Liu said.

Caps and peels are sold at 1 yuan per set while each quality standard mark costs half a yuan, various sources have revealed.

Overall, a barrel of fake water costs bogus producers only 2.5 to 3 yuan, whereas the real ones cost them 6 yuan each.

In either case, a barrel of water is sold at well over 10 yuan in the market.

Liu said these counterfeits began to appear in the Beijing market in 2002, five years after barreled water emerged as an industry.

Since then, bogus producers have taken advantage of not only loopholes in the production process, but also poor awareness on the part of companies and consumers.

Barrel water producers' lack of supervision, for example, has given leverage to counterfeit makers in each chain of the production process, from corporate distributors to unauthorized workshops and water delivery stations.

On the consumer end, bogus producers have learnt to categorize consumers into sub-groups from extremely careful inspectors to purely passive buyers, and deliver water accordingly.

Beijing's experience is not an isolated one. Three years ago, a nationwide inspection on barreled water by the State Administration for Industry & Commerce found a 22 percent substandard rate.

In a most radical case, 80 percent of barreled water in the southern province of Jiangxi were reportedly shoddy.

Qiu Baochang, a lawyer with the Chinese Consumers' Association, told China Daily that bogus production directly violated the Food Hygiene Law, the Law on Product Quality, as well as the Law on the Protection of Rights and Interests of Consumers.

"Those who have profited more than 200,000 yuan are also subject to prosecution under the Criminal Law," he added.

More than 10 million Chinese are regular users of drinking water machines.

(For more biz stories, please visit Industry Updates)