Danone’s China Strategy Is Set Back – James. T. Areddy and Deboah Ball
From The Wall Street Journal:
More than most companies, France’s Groupe Danone SA has trusted homegrown entrepreneurs to spread its food and beverages around the world. But that strategy is being called into question amid a public battle between the maker of yogurt, beverages and cookies and one of its key partners in China.
Danone says its joint-venture partner for the past decade — the multimillionaire entrepreneur Zong Qinghou — has cut it out of more than $100 million of revenue. Mr. Zong did so, Danone says, through a network of bottling plants and wholesalers that makes many of the same soft drinks the two sides have produced together since 1996 under the name Wahaha, one of China’s best-known brands.
Mr. Zong, who founded Wahaha and has always run the operations, though legally he controls only 49%, doesn’t deny he also owns a separate business that in many ways mirrors the operations set up with Danone. But he says the issues are more complex than brand piracy. [Full Text]
– See also: Rancor Level Rises in Rift Over Danone China Venture and Brawl threatens huge investment by Danone in China on The New York Times