Danone in dispute with Chinese beverage partner

by FoodBusinessNews.net Staff
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PARIS — Responding to reports in the Chinese press, Groupe Danone this week confirmed it is in discussions with Zong Qinghuo, its partner in the Danone Wahaha joint venture.

According to Danone, the discussions are centered on the company’s accusation that Wahaha has violated a non-competitive clause in a joint venture contract signed in 1996 by secretly setting up sales companies that directly competed with the venture by selling unauthorized bottled water, tea and energy drinks under the Wahaha brand.

In 1996, Danone joined with Wahaha to form five subsidiaries, of which Danone owns 51% and Chinese shareholders own 49%. According to the terms agreed to by Danone and Mr. Zong, the joint ventures were granted the exclusive rights of production, distribution and sales of products under the Wahaha brand.

Wahaha has not responded to the allegations.

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