Beverages News
- Wahaha's CEO confident of winning suit against Danone
Date: 5-Jul-2007 Sources: (Shenzhen Daily)
DOMESTIC beverage maker Hangzhou Wahaha Group Co. chairman Zong Qinghou said Tuesday he is confident of winning a lawsuit against its French joint-venture partner Groupe Danone SA.
He also said Danone is in violation of a non-competition clause of holding stakes in other Chinese food companies.
Danone and multimillionaire Zong have been waging a public battle for several months.
Danone accuses Wahaha of illegally selling products identical to those sold by the companies' joint ventures. The French company has filed a lawsuit in Los Angeles seeking more than US$100 million for the alleged illegal sales and has also filed for arbitration in Stockholm to help resolve the dispute.
Zong responded to Danone's action by resigning as chairman of Wahaha joint ventures, and accused board members of Paris-based Danone of slandering and bullying him.
'We have the confidence to win the lawsuit and the arbitration. We believe Stockholm is fair,'Zong said in a press conference in Hangzhou on Tuesday.
Zong founded the Wahaha group in the late 1980s. In mid-1996, along with Danone he began establishing a string of nearly 40 joint ventures, each 51 percent owned by Danone. But earlier this year, Danone officials accused Zong of undermining their business with a parallel network of facilities making many of the same products.
Wahaha is one of China's best-known brands of bottled water and drinks.
The dispute between Wahaha and Danone is a blow to the French company's strategy of piggybacking into new markets.
Danone has been aggressively acquiring stakes in Chinese food companies over the past two decades. It owns 49 percent of a joint venture with Mengniu Dairy Co., 24.3 percent of Huiyuan Beverage & Food Group Co. and 20 percent of Bright Dairy & Food, among others.
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