The position is that bottled water was standard rated with effect from November 1992. This change was made to correct a competitive anomaly, as prior to that non manufactured bottled water was zero rated while similar competing products such as soft drinks were standard rated. The change in the VAT treatment coincided with the removal of excise duty from bottled water in November 1992.
Where a product was zero rated prior to 1 January 1991 but subsequently standard rated: it is not possible to reintroduce the zero rate for that product. However, under Annex III of the EU VAT Directive, Member States are permitted to apply a reduced rate to bottled water. It would therefore be possible under EU VAT rules to apply a reduced rate of 13.5%, rather than 21% to these products.
In any event, if there was a reduction in the rate of VAT applying to bottled water, I am not convinced, given the mark ups in the sector, that any rate reduction would necessarily be fully reflected in retail prices for bottled water.