China’s richest man faces boycott threat as he is accused of betraying fellow drinks billionaire

Zhong Shanshan, founder and chairman of Chinese bottled water giant Nongfu Spring, has hit back at online social media posts that accused him of “biting the hand that fed him” by undermining his former partner Zong Qinghou , the late founder of the rival drink. producer Hangzhou Wahaha Group.

In a statement posted on Chinese social media platform Weibo on Sunday, Zhong said the allegations against him began spreading online after Zong’s death last week. The publications claimed that Zhong built his fortune by first working with Wahaha as a reseller, but later created Nongfu to compete with Wahaha after being fired by Zong for violating company rules prohibiting the sale of his products beyond provincial borders.

“For me, Zong has always been a respected entrepreneur. We were both mentors and friends to each other, and of course, we were also competitors,” Zhong said in the release. “During his lifetime, Zong despised online attacks. I never expected that after Zong passed away, so many people would make defamatory statements against me and Nongfu Spring on the Internet. This is definitely not what Zong would have wanted to see.

Forbes Asia contacted Nongfu Spring and Wahaha for comment, but they did not respond to our requests.

The accusations against Zhong caused Nongfu’s shares to fall about 7% on the Hong Kong stock exchange over the past week through Tuesday, and also sparked calls from consumers to boycott Nongfu’s bottled water .

In his statement, Zhong denied rumors that he began building his fortune as a reseller of Wahaha products. The chairman of Nongfu said his first success in business was due to a curtain company he founded. He added that he had “never received a salary from Wahaha, let alone been fired.”

Zhong also commented on Nongfu’s long-standing rivalry with Wahaha. More than two decades ago, Nongfu launched an advertising campaign claiming that its water, sourced from natural sources like springs and lakes, had greater health benefits than water purified in factories. The campaign at the time prompted a group of beverage companies led by Wahaha to appeal to Chinese regulators to accuse Nongfu of false advertising. Nongfu was fined 200,000 yuan ($28,000), but over time the company became the country’s leading bottled water producer.

“We had lawsuits against each other, but ultimately Zong and I reached a peaceful settlement, which was witnessed by Hangzhou city officials at the time,” Zhong said. “Whether it is Wahaha or Nongfu Spring, we have always had the same commitment: to produce quality products for consumers. »

The founder and president of Wahaha died last Sunday at the age of 79. Zong was once China’s richest person in the early 2010s, but saw his fortunes decline over the years as Nongfu and other competitors eroded Wahaha’s dominant position. Last year, Zong was ranked 53rd on China’s 100 richest list, with a net worth of $5.9 billion.

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