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Nongfu Spring, a Chinese beverage group founded by China’s richest man, has demanded an apology from Hong Kong watchdogs after it said its bottled water met EU limits for bromate content.
The company’s shares closed down about 3 percent in Hong Kong on Tuesday after the Hong Kong Consumer Council released a report on the quality of 30 bottled water samples.
The water contained three micrograms of bromate per litre, the EU limit for natural mineral waters, the report said, adding that the “disinfection by-product” can cause symptoms such as nausea and stomach pains if ingested in large quantities.
The dispute comes as Nongfu is embroiled in a price war to undercut rivals in a bid to gain market share domestically. Its shares have fallen 18 percent in the past month.
The company was founded in the mid-1990s by entrepreneur Zhong Ruirui, whose fortune has fallen by nearly $20 billion since early May, putting his net worth at $53 billion, according to the Bloomberg Billionaires Index.
In response to the watchdog’s report, drinks industry groups argued the water samples should have been classified as drinking water – Europe has a looser limit of 10 micrograms per litre.
In a letter sent on Tuesday, Farmer’s lawyers accused the group of making an “erroneous” assessment and demanded an “apology” for the report.
“You have inflicted fear on consumer groups in Hong Kong and mainland China and caused Nongfu Springs significant losses,” lawyers representing the company said in a letter to the Consumer Affairs Council.
In a letter posted on Chinese social media on Tuesday, the company said Nongfu’s products ” [relevant regulations]”
The consumer group responded by saying it had not found any safety issues in the water samples and was simply comparing brands on the basis of “value for money”.
The dispute between Nongfu and rival brands such as Ehaha, whose founder Zong Qinghou was once China’s richest man, intensified after the company was accused by Chinese nationalists online of being “pro-Japanese” because of its product packaging and other aspects. Nongfu denies the allegations.
“Weakening consumer sentiment” is slowing demand for the brand, said Jackie Tsang, a Hong Kong-based equity analyst at Morningstar Inc., who last month cut his forecast for Nongfu’s annual revenue growth in 2024 to 16% from 18%.
