A review by the New Hampshire Department of Justice into the controversial purchase of an industrial property in Nashua by a China-based beverage company with alleged ties to the Communist Party has cleared a state employee who helped facilitate the transaction of any wrongdoing.
In the wake of the review, however, the New Hampshire Department of Business and Economic Affairs has implemented new procedures to better screen potential deals with foreign entities for potential concerns.
Nongfu Spring, sometimes referred to as the “Coca-Cola of China,” purchased a 375,000-square-foot warehouse in Nashua for $67 million earlier this year, with the intention of using the space to bottle tea and other beverages. The transaction raised red flags, in part, due to the relationship the company has with the Chinese government, and because the purchase price was four times the assessed value of the land.
Following repeated calls for an investigation, New Hampshire Attorney General’s office released an 11-page report on Monday that lays out the timeline of the purchase, as well as the role that employees at Business and Economic Affairs played in the transaction. Previous reporting by NHPR based on internal communications at the agency found that Michael Bergeron, a long-time business development manager for the state, helped coordinate meetings between representatives from Nongfu Spring, as well as the City of Nashua and Pennichuck, the local water utility.
The attorney general concluded that Bergeron “did not violate any existing BEA or State policies or protocols through his actions in helping to facilitate the purchase of the subject property,” though the report noted that he failed to notify his superiors at the state agency until months into the process. (The attorney general’s report does not name Bergeron, instead referring to him throughout as a “business development manager.”)
In response to the report, Executive Councilors John Stephen, Joe Kenney and David Wheeler called on leaders at Business and Economic Affairs to begin issuing quarterly updates on any involvement the agency has with foreign companies, and instructed the agency to begin holding public hearings when community utilities may be impacted by a project.
“We find there has been an appalling lack of communication with the public, and a troubling absence of community engagement or public hearings related to this sale—despite its significant potential impact on the water supply of an entire community,” the Councilors wrote.
Ayotte issues executive order on use of foreign software
Following the release of Monday’s report, Gov. Kelly Ayotte said that “foreign adversaries like China should not be doing business in New Hampshire.” She also issued two executive orders Monday, including a measure prohibiting state agencies from purchasing or using software or hardware linked to countries considered to be foreign adversaries. The order stops short of an outright ban, however, instead only blocking the use of technologies that pose an “unaccessible level of cybersecurity risk.”
In 2022, former Gov. Chris Sununu signed a similar order prohibiting a range of software products with ties to China, including TikTok, from use on all state devices.
In a separate order signed Monday, Ayotte instructed state agencies to notify the Department of Justice about any proposed or completed transactions of state-owned property that involve foreign adversaries. In June, New Hampshire lawmakers enacted a sweeping prohibition on the lease or purchase of any land in the state by actors from countries including China, North Korea, Russia and Iran.
The law did not apply retroactively to Nongfu Spring, though, which completed its purchase of 80 Northwest Boulevard in February. The building was previously used by a supplier of education materials, but was largely vacant at the time.
While the $67 million deal would later raise questions, the attorney general concluded that the purchase prices may not have exceeded market value, despite the land’s assessment of just $15 million. “In fact, the property was reportedly one of the few structures of its size in New England available at the time that was capable of meeting the bottling company’s structural and technical requirements,” the report concluded.
Bergeron, who has worked at Business and Economic Affairs since 1997, helped coordinate a tour of the facility in June 2024 that included Zhong Shanshan, the founder of Nongfu Spring, who has a net worth of more than $77 billion, according to Forbes.
Three months later, Bergeron followed up with Nongfu Spring representatives about the visit.
“I am just checking in as a follow up to your visit to New Hampshire last spring,” Bergeron wrote to Zhong, according to emails obtained by NHPR. “Is there any further interest in establishing your new operation at the building you toured in Nashua, New Hampshire?”
Bergeron went on to share information about the appeal of the Granite State, noting that the state “offers the lowest taxes in the northeast, tax credits, talent attraction services, and hands on approach to helping you and your team start production on time.”
At that time, Nongfu Spring was also reportedly considering a property in Maryland.
In November, Bergeron attended a meeting that included Shanshan, engineers from China, representatives from the City of Nashua, as well as Pennichuck, Eversource and Liberty Gas. “The discussion covered a range of topics, with an emphasis on how the property could be modified or upgraded for the purposes of brewing, bottling and distributing tea and other beverages,” the Attorney General’s report found.
After closing on the property, Nongfu Spring, through its U.S.-based entity, filed an application with Nashua to alter the property’s driveway, a process typically not subject to a public hearing. But in May, the company withdrew its application, and said it was pausing development on the space, citing “evolving global trade and investment conditions.” The project was estimated to create more than 200 jobs in Nashua and result in more than $200 million in economic development to the parcel.
It isn’t clear when Bergeron last communicated with any representatives from Nongfu. In July, an executive vice president for the company emailed Bergeron, according to the report, but nobody from the state responded. At the time, company representatives said they had secured federal approval for the project, though the attorney general said he has not been able to confirm the status of any federal licenses. In August, Rep. Maggie Goodlander, whose congressional district includes Nashua, requested that the U.S. Treasury Department retroactively review the transaction.
The attorney general concluded that across his months of communication with the company, Bergeron did not violate any rules or laws. However, the report noted that Bergeron failed to inform his supervisor that the Nashua land sale involved a China-based entity until January 2025, months after his involvement in the project began.
A spokesperson for the BEA previously stated that the agency provided “no substantive assistance” to the project, despite Bergeron’s repeated involvement in meetings with the company.
Earlier this month, Taylor Caswell, the commissioner for the agency, announced he was resigning after months in which members of the Executive Council declined to advance his renomination to lead the agency, which he has led for eight years. In a published op-ed, Republicans on the council pointed to Caswell’s record of business development as one reason for his removal, though they didn’t mention the Nongfu Spring transaction in the article.
