Background
The Government Logistics Department ("GLD") has terminated a contract with supplier Xin Ding Xin Trade Co., Limited (鑫鼎鑫商貿有限公司) ("XDX") for the supply of bottled drinking water to government offices1. The decision, announced on 18 August 2024, follows allegations of trademark infringement and counterfeiting made by a major Chinese beverage company, Robust Group Co., Ltd. (樂百氏(廣東)飲用水有限公司) ("Robust Group")2.
The incident began in June when the GLD entered into a 36-month supplier contract with XDX. The bottled water packaging labels indicated that the manufacturer was Robust Group. Shortly after the new "Xin Le Guan Yin Shan" (鑫樂觀音山) water bottles were delivered, Robust Group came forward with a public accusation. Robust Group's legal director, Mr Leung, clarified that neither XDX nor its "Xin Le" (鑫樂) brand had any affiliation with Robust Group. "This is a case of counterfeit and infringing products," stated Mr Leung. He alleged that XDX had unlawfully printed Robust Group's name and its Guangzhou factory address on the product labels, falsely presenting Robust Group as the manufacturer3.
After receiving a letter from Robust Group in early August, GLD commenced an investigation. Following a police enforcement action on17August and a review of new operational information about XDX, the GLD concluded it could no longer trust the supplier to fulfill its contractual obligations. Consequently, the water supply contract, along with three other chemical supply contracts linked to XDX's owners, was immediately terminated4.
To ensure an uninterrupted water supply for government offices, the GLD has temporarily appointed AS Watson Group (HK) Limited as the interim supplier5.
The legal framework
The allegations against XDX touch upon several critical areas of intellectual property and consumer protection law. Theprimarylaws to this case in Hong Kong are:
Trade Descriptions Ordinance (Cap. 362)
This is the cornerstone of consumer protection law in Hong Kong. This Ordinance criminalizes false trade descriptions applied to goods and services. For example, Section 7 makes it an offence for any person to apply a falsetradedescription to any goods. By labelling the water with Robust Group's name and manufacturing address, XDX allegedly applied a false description about the manufacturer's identity and the place of production. Penalties for breaching this Ordinance are severe, including fines and imprisonment.
Trade Marks Ordinance (Cap. 559)
This ordinance protects registered trademarks. For example, Section 18 provides that a person infringes a registered trademark if they use an identical or similar sign on identical or similar goods/services without the consent of the proprietor. If the Robust Group names ("樂百氏") are registered trademarks in Hong Kong, using them on water bottles without authorisation constitutes a clear case of trademark infringement, opening XDX to potential civil liability.
Copyright Ordinance (Cap. 528)
While less central, copyright could be involved if XDX directly copied unique artistic elements from Robust Group's labels, packaging, or logos, which are protected as artistic works.
Takeaway
This episode offers crucial lessons for both government bodies and the business community,particularly where fraudulent companies and shell shareholders are increasingly proliferating in the market.
For government departments, especially for consumable goods, verifying a supplier's credentials and authorisations must go beyond financial and operational checks. It is critical to conduct thorough due diligence on the identities of company owners and related parties to confirm they are legitimate entities. Tender processes should include robust verification of intellectual property rights and manufacturing agreements to ensure the legitimacy of products at the source.
This case also underscores the strength of Intellectual Property laws as a tool for brand protection. Companies must actively monitor the market for infringements and be prepared to act decisively to protect their reputation and consumers. When engaging in partnerships, verifying the ultimate beneficial ownership of any company is always a critical first step.
Footnotes
1. See GLD's press release "Termination of contract for bottled drinking water for government offices", published: 18 Aug 2025. https://www.info.gov.hk/gia/general/202508/18/P2025081801004.htm
2. See TVB's news "政府辦公室飲用水供應商鑫鼎鑫被指涉侵權 物流署強調將嚴肅跟進", published: 18 Aug 2025. https://news.tvb.com/tc/local/68a02a5298fc21abcaf4cc71
3. Ibid.
4. See GLD's press release.
5. Ibid.
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