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Good. The rule is stupid and deserves to be worked around. Water is essential. I hate when I go to these kinds of public places and they give you no option to get water other than bringing it yourself. Poor logistics on the part of the event organizers.
The official reason for such rules are usually "we need a mix of vendors" or something like that.
The unofficial, true reason is usually that the organizer wants to be the only one selling water so they can sell it for $5.
For real... do they want people dying??
They want people to not be there, at least for long.
Isn't that like the opposite of the purpose of big events like these?
It doesn't look like the rule is from the event organizers. Most likely local government who want's the money from the event while keeping the turnover high so that people will come, spend their money, and fuck off as soon as possible.
I think it's more likely that the festival has other stalls selling water for a ridiculous markup.