Danone’s China Strategy Is Set Back – James. T. Areddy and Deboah Ball

09danone.600.jpg The Wall Street Journal and The New York times have covered the legal dispute between Wahaha and Danone , and China Law Blog has analyzed this news.

From The Wall Street Journal:

More than most companies, France’s Groupe 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 , 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

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