Xinjiang court deals Danone further setback

PUBLISHED : Saturday, 22 December, 2007, 12:00am
UPDATED : Friday, 28 October, 2016, 9:17am

French food giant Groupe Danone has been dealt yet another setback two weeks after a Xinjiang court threw out the company's suit against Zong Qinghou, president of estranged partner and the mainland's largest drinks maker, Wahaha Group.

According to state news agency Xinhua, the Xinjiang court ruled earlier this month that plaintiff Danone had no case in claiming that plaintiff Mr Zong was involved in any competing business through an independent venture in the province.

The court also rejected Danone's accusation that Mr Zong, formerly president of a Danone-Wahaha joint venture in Hangzhou, used the latter's operating and commercial secrets to help his Xinjiang venture.

The court rejected Danone's claim against Mr Zong for compensation for failing to seek consent from the French partner to set up the Xinjiang venture.

Danone was ordered to pay 24,565 yuan in court fees. Company officials were not available for comment yesterday.

The latest ruling was the third setback for Danone in a series of disputes between the partners. It follows a Hangzhou judgment that Wahaha owns the joint venture brand and another ruling that the mainland drinks maker did not infringe its non-competition undertaking.

Danone holds 51 per cent of the joint venture, formed in 1996.

Mr Zong, a Communist Party member, stepped down as chairman of the venture in June when the dispute with Danone intensified.

He blamed the dispute on cultural differences and accused the French group of failing to help the mainland firm expand.

The dispute, dating back to the beginning of the year, is among the most high-profile between a foreign company and a mainland partner. It led to Chinese and French state leaders calling on Danone and Wahaha for an amicable reconciliation.