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BIZCHINA / Developments

Wahaha to countersue Danone

(Xinhua)
Updated: 2007-06-27 09:28

Chinese beverage giant Wahaha Group is to countersue its French joint
venture partner Danone and seek compensation of up to five billion euros,
the company confirmed on Tuesday.

Wahaha spokesman Shan Qining told Xinhua that Wahaha had decided to
"demand justice by legal procedures" after Danone had filed for
arbitration and lawsuits against it.

Wahaha said in a separate statement, "We will respond actively to the
lawsuits filed by Danone in Stockholm and the United States, and we plan
to launch a countersuit demanding compensation of two billion, three
billion or five billion euros."

The statement continued, "We have conclusive evidence that Danone has
broken the law.

"Wahaha is not against the opening-up policy of China, or cooperation
with others, or cooperation with foreign investors. However, we want the
cooperation to be equal, mutually beneficial, complementary, mutually
respectful with equal interest," the statement said.

Danone was unavailable for comment on Wahaha's intentions.

Wahaha has applied for arbitration over a trademark dispute with Danone
at the Hangzhou Arbitration Committee, asking the committee to terminate
a trademark transfer contract signed between Hangzhou Wahaha Group and
the joint venture of Wahaha and Danone in 1996.

Wahaha said its contract with Danone was never approved by China's
trademark authority, which meant the transfer was invalid and the
contract should be terminated.

Shan said the Wahaha trademark belonged to Hangzhou Wahaha Group and not
with Danone.

Danone, which owns 51 percent stake of the 39 joint ventures, has accused
Wahaha of setting up independent companies and selling products identical
to those sold by the joint ventures.

Danone is demanding a 51-percent stake in the non-joint venture
companies, which Wahaha Group has rejected.

Danone filed its first lawsuit against Wahaha on May 9 in Stockholm.

On June 4, Danone filed a lawsuit in the Los Angeles-based Superior Court
against Ever Maple Trading Ltd. and Hangzhou Hongsheng Beverage Co. Ltd,
and two individuals related to the companies.

Ever Maple Trading Ltd. is the controlling shareholder of Hangzhou
Hongsheng Beverage, which is the parent company of Hangzhou Wahaha Food
and Beverage Sales Co., Danone's joint venture partner in China.

On June 6, Zong Qinghou, founder and chairman of Wahaha Group, resigned
from his post as chairman of its 39 joint ventures with Danone.

Emmanuel Faber has been named interim chairman of the joint ventures.

(For more biz stories, please visit Industry Updates)

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