In the drink: risk from reuse.

Bottled water: a massive mark-up. Photo: WIREIMAGE

Australians are paying nearly 2000 times more for what is "basically tap water" than they would if they went straight to the source, the nation's consumer watchdog says.

A Choice review has found consumers are shelling out more than $3.88 a pop for bottled water.

"If you drink two litres of water a day straight from the tap, you'll pay $1.50 a year," spokesman Tom Godfrey said in a statement.

"Drink the same amount from single-serve bottles and you'll be $2800 out of pocket ... it's a clear case of consumers being brain-washed into thinking bottled is better - which simply isn't the case."

Mr Godfrey said less than half of all PET plastic bottles were recycled, while the remaining 60 per cent went straight to landfill.

The Australasian Bottled Water Institute was quick to return fire on Friday.

"Any comparison of bottled water to tap water is absurd," the group's CEO Geoff Parker said.

"Bottled water competes with every other beverage it shares shelf space with, whether that be in a vending machine, supermarket aisle or shop fridge.

"People willingly pay for the convenience of a zero-kilojoule hydration option when they're out and about."

Mr Parker said people in "a nation grappling with obesity" should be drinking more water, no matter what the source.

AAP