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Chinese beverage group Nongfu Spring, founded by the country’s wealthiest person, has demanded that a Hong Kong watchdog apologise after it said the company’s bottled water hit the EU’s limit for bromate content.
Shares in the company closed almost 3 per cent lower in Hong Kong on Tuesday after the territory’s Consumer Council released a report on the quality of 30 bottled water samples.
The report said the water contained three micrograms per litre of bromate, the maximum limit set by the EU for natural mineral waters. It added that this “disinfection byproduct” can cause symptoms including nausea and abdominal pain if ingested in large amounts.
The dispute comes as Nongfu 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.
The company was founded in the mid-1990s by the entrepreneur Zhong Shanshan. According to the Bloomberg Billionaires index, his wealth has shrunk by almost $20bn since early May, giving him a net worth of $53bn.
In response to the watchdog’s report, 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,” lawyers acting for the company said in a letter to the consumer council.
They added in the letter, which the company posted on Chinese social media on Tuesday, that Nongfu’s products were “fully compliant with [relevant regulations]”.
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.
Nongfu’s struggle with rival brands such as Wahaha — whose founder Zong Qinghou was previously China’s richest person — escalated after the company was targeted by online Chinese nationalists who accused it of being “pro-Japan”, in part over its product packaging. Nongfu has rejected the claims.
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.
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