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During the peak sales season for bottled water, a piece of news about Nongfu Spring once again attracted market attention.

On July 16, Nongfu Spring announced that it had commissioned a Hong Kong lawyer to ask the Hong Kong Consumer Council to make a formal apology to Nongfu Spring and its consumers.

The incident was caused by the article "Drink the Water and Remember the Source: Flavor, Mineral and Safety Testing of 30 Bottled Waters" released by the Hong Kong Consumer Council on July 15.

According to the Hong Kong Consumer Council, 30 common bottled water samples were purchased on the local market and tested. It was found that bottled water samples from Baishuishan and Nongfu Spring in mainland China were both found to contain 3 micrograms of bromate per liter, reaching the EU's maximum limit for bromate applicable to ozone-treated natural mineral water and spring water.

In response, the Hong Kong Consumer Council stated that consuming large amounts of bromate can cause nausea, abdominal pain, vomiting and diarrhea, and in severe cases may also affect the kidneys and nervous system.

The Hong Kong Consumer Council said that this test was mainly based on relevant laws in Hong Kong, the United States and the European Union and the Codex Alimentarius Commission's "General Standard for Bottled/Packaged Drinking Water (Excluding Natural Mineral Water)" and "Standard for Natural Mineral Water".

On July 16, Nongfu Spring stated in a statement on its official Weibo account that the article published by the Hong Kong Consumer Council was based on misunderstanding and unprofessional analysis, and made an objective evaluation of the bromate content in Nongfu Spring products, causing great damage to Nongfu Spring's reputation. Nongfu Spring solemnly requests that the Council clarify and apologize in writing and eliminate all negative impacts on Nongfu Spring.

Nongfu Spring stated that the article published by the Hong Kong Consumer Council contained three major errors: incorrect application of standards, incorrect standard judgment, and obvious subjective misleading.

Nongfu Spring said in a statement that the Hong Kong Consumer Council article indicated that the Nongfu Spring product under test was a natural drinking water product, and the ingredients of the product were clearly marked as "natural water (deep lake water)" in the test result table. However, when evaluating it, the Hong Kong Consumer Council placed it in the "natural mineral water" sequence and compared it with different types of products, and applied the EU "natural mineral water" standard.

In fact, even if Nongfu Spring's drinking water products adopt EU standards, they should be evaluated according to the EU's "drinking water" safety standards rather than the "natural mineral water" standards. According to the EU's drinking water safety standards, the safe content of bromate is no more than 10 micrograms per liter. In various drinking water safety standards in China, Hong Kong, the United States, Japan, the World Health Organization, etc., the bromate safety regulations are also no more than 10 micrograms per liter. Nongfu Spring's drinking water products are 3 micrograms per liter, which fully meets the drinking water safety standards of the above countries and regions and are high-quality qualified products.

Nongfu Spring also pointed out that the Hong Kong Consumer Council avoided directly stating important conclusions such as "qualified or not" when conducting the evaluation, but deliberately confused the safety standards and used imprecise expressions such as "reaching the upper limit" that can easily lead consumers to misunderstand the safety of the product. What's worse, the Hong Kong Consumer Council used very unprofessional language in the article and then commented that "multiple use" and excessive consumption of bromate can cause nausea. According to the New York State Department of Health, those who experienced gastrointestinal symptoms such as nausea, vomiting, diarrhea and abdominal pain were exposed to bromate levels thousands of times higher than the bromate in the tested drinking water products.

"Your behavior has caused huge negative impact on Nongfu Spring. Nongfu Spring warns you to immediately clarify, apologize and eliminate the impact, otherwise Nongfu Spring will take further action," Nongfu Spring said in the article.

It is worth mentioning that the bottled drinking water market has been very busy recently, and a "price war" is surging. According to the report, reporters found that the price of a single bottle of drinking water from well-known brands such as Nongfu Spring, Yibibao, and Wahaha has dropped to less than 1 yuan.

At the end of April this year, Nongfu Spring launched green bottle pure water, with a retail price of 2 yuan per bottle. By June, the price of Nongfu Spring green bottle pure water in supermarkets was as low as 1 yuan per bottle. Now, the discount has been further increased, and Nongfu Spring Douyin official flagship store has lowered the price to 0.82 yuan per bottle.

On the evening of July 9, Nongfu Spring released an announcement of its share purchase plan, stating that "based on the recognition of the company's value and confidence in the overall business development and growth potential in the future", the company's controlling shareholder Yangshengtang plans to acquire and increase its holdings of the company's H shares within 6 months, with an estimated total amount of no more than HK$2 billion. The announcement shows that Yangshengtang directly holds 66.82% of Nongfu Spring's total share capital; Zhong Shanshan directly and indirectly holds 83.98% of Nongfu Spring's total share capital through Yangshengtang.

In 2023, thanks to the popularity of Oriental Leaves, Nongfu Spring's tea beverage segment's revenue ratio exceeded that of its drinking water business for the first time. In 2023, Nongfu Spring's total revenue was close to 43 billion yuan, a year-on-year increase of 28%; its net profit attributable to shareholders exceeded 12 billion yuan, a year-on-year increase of 42%.

As of this morning's closing, Nongfu Spring was priced at HK$32.6 per share, down 2.69%, with a total market value of HK$366.6 billion.

Editor: Peng Bo

Proofreading: Yang Shuxin