The Hong Kong Consumer Council, the Chinese city's consumer protection watchdog, is causing a headache for the largest bottled water supplier in China. Nongfu Spring, founded by billionaire Zhong Shanshan, is now demanding an apology for claims it deems "extremely unscientific."
The watchdog, 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.
Some Hong Kong lawmakers criticized the Consumer Council 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 dropped by more than 6% on the Hong Kong stock exchange on Tuesday, through rose about 2% on Wednesday.
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 almost 25% so far this year—has shrunk the bottled water tycoon's wealth by $15 billion this year, according to Bloomberg's calculations.
