Update, July 17, 2024: This article has been updated to reflect the Hong Kong Consumer Council’s decision to rescore Nongfu Spring’s product.
China’s largest bottled water supplier, founded by billionaire Zhong Shanshan, picked a fight with Hong Kong’s consumer protection watchdog—and successfully got it to rescore its product after an earlier report flagged relatively high levels of a chemical.
The Hong Kong Consumer Council, in a report released Monday, found that Nongfu Spring’s bottled water was close to a European Union threshold for a chemical that’s dangerous when consumed in large quantities. The claim was part of a broader analysis of 30 bottled water brands.
According to the watchdog, Nongfu’s bottled water contains three micrograms of bromate per liter, close to the maximum limits for “natural mineral water” set by the EU. Bromate is a byproduct formed when drinking water is disinfected. Consuming large amounts of it can cause nausea and abdominal pain, according to the watchdog.
Nongfu Spring, in a lawyer’s letter sent to the council, argued that its products should be evaluated by the safety standards for drinking water—10 micrograms per liter, as set by the EU, China, the U.S., and the World Health Organization—rather than the more stringent standards for “natural mineral water.”
The bottled water company also said that the Consumer Council should judge its products by mainland Chinese or Hong Kong standards, rather than European ones. Nongfu claimed the report had caused “panic” in both Hong Kong and mainland China, and demanded a clarification and apology for the “unscientific” report.
On Thursday, the Hong Kong Consumer Council said that, after an “in-depth” exchange with Nongfu Spring, it would reclassify the company’s bottled water as “drinkable natural water,” which has higher limits for bromate concentration. The watchdog acknowledged Nongfu Spring’s water complied with mainland China’s regulations as well as that of the WHO and EU, and that it was safe to drink. (It also increased Nongfu Spring’s overall score, from 4.5 stars to five stars, the maximum level).
The watchdog’s decision came after some Hong Kong lawmakers criticized it on Wednesday. Doreen Kong, a member of Hong Kong’s legislature, told a radio show that the watchdog had “room for improvement” in how it communicates its findings, so as to avoid hurting “minority stakeholders.”
“The report of the Consumer Council widely circulated on mainland media, causing great concern among the public,” she said, according to the South China Morning Post.
The Hong Kong Consumer Council is an independent body whose leadership is appointed by the Chief Executive, the city’s leader.
Neither Nongfu Spring nor the Consumer Council immediately responded to Fortune’s request for comment, though the watchdog confirmed that it received a letter from Nongfu to other outlets.
Nongfu Spring’s shares rose over 4% in early Thursday trading in Hong Kong, erasing losses from the week.
Nongfu’s rough year
Nongfu’s dispute with the Hong Kong consumer watchdog is the latest setback for the beverage group.
Earlier this year, nationalist social media users targeted Nongfu Spring for allegedly using Japanese-style images on its bottles. Users filmed themselves pouring the company’s water into the toilet or using it to clean the floor.
Nongfu Spring founder Zhong Shanshan is still China’s richest person, with Bloomberg estimating his net worth at $52 billion. (PDD Holdings founder Colin Huang is in second place, with $47.9 billion).
But a drop in the company’s share price—down over 20% so far this year—has shrunk the bottled water tycoon’s wealth by $15 billion this year, according to Bloomberg’s calculations.
