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Chinese beverage group Nongfu Spring, founded by the country’s wealthiest person, has demanded that a Hong Kong watchdog apologise for damaging its brand after it published a report that included details about its bottled water hitting bromate limits.
Hong Kong shares in the company closed almost 3 per cent lower on Tuesday after Hong Kong’s Consumer Council released a report on the quality of 30 bottled water samples. The report included information on levels of “disinfection byproducts” such as bromate and chloroform.
Bromate, formed primarily when applying ozone to disinfect water, can cause possible nausea, abdominal pain, vomiting and diarrhoea if ingested in large amounts, the watchdog said in the report.
The watchdog said samples of bottled water from Nongfu and another Chinese brand were found to contain 3 micrograms per litre of bromate, the maximum limit set by the EU for natural mineral waters.
The beverage group argued that the water sample should have instead been classified as drinking water, for which Europe sets a less stringent limit of 10 micrograms per litre.
Nongfu’s lawyer’s letter on Tuesday accused the organisation of making an “erroneous” assessment and demanded an “apology” over its report.
“Your organisation . . . has caused fear among Hong Kong and mainland Chinese consumer groups, causing significant losses for Nongfu Spring whose products are fully compliant with [relevant regulations],” lawyers acting for Nongfu said in a letter to the consumer council, which the company posted on Chinese social media on Tuesday.
The consumer body said in response it did not find safety issues with any water samples and was only comparing brands on a “value for money” basis.
The dispute comes as Nongfu, founded by entrepreneur and China’s wealthiest person Zhong Shanshan, is embroiled in a price war in its home country, undercutting rivals to gain market share. Its share price has dipped 18 per cent over the past month.
Its struggle with rival brands such as Wahaha — whose founder Zong Qinghou was previously China’s richest person — escalated after Nongfu was targeted by online Chinese nationalists who accused it of being “pro-Japan”, in part over its product packaging. Nongfu has rejected the claims.
Zhong’s wealth has shrunk by almost $20bn since early May, giving him a net worth of $53bn, according to the Bloomberg Billionaires Index.
Jacky Tsang, a Hong Kong-based equity analyst for Morningstar, said “unfavourable consumer sentiment” was damping demand for the brand. Last month, he lowered his forecast for Nongfu’s annual revenue growth for 2024 from 18 per cent to 16 per cent.
