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Wahaha's Zong demands an apology

By Xiao Wang (China Daily)
Updated: 2007-06-15 09:44

The Wahaha chairman has vowed that the fight with Danone will never end unless the French partner agrees to rescind the alleged unequal conditions in their contract and tenders a public apology.

Zong Qinghou, Wahaha's founder, refuted a statement released by Danone on Tuesday that alleged, among other things, that Zong's recent resignation from Wahaha-Danone joint ventures was "entirely his decision to pursue his own interests", and that Zong's earlier "open letter" was "either incomplete, twisted, out of context, or simply untrue".

Zong retorted that Danone's acquisition of Chinese beverage producer Robust resulted in great losses for the latter in the second year of the acquisition. "Danone's behaviors in the Chinese market in the past has proved its hostility toward its joint venture companies," Zong alleged.

Wahaha Chairman Zong Qinghou pictured through a window in Beijing. [Bloomberg]

As for the transfer of the Wahaha brand, Zong said it's meaningless for Danone to start the related procedure in view of an earlier ruling by the State Brand Administration that has effectively blocked such a transfer.

Zong also hinted that he would seek a ruling from the Hangzhou Arbitrage Committee on the disputed validity of certain transactions related to the brand conditions in the contract with Danone.

In its earlier statement, Danone pointed out that it's inappropriate for anyone to seek to "leverage" employees, business partners and the public to support their goal of maximizing their own personal wealth while endangering the business continuity of the company.

"Danone's objective has been and will always be to ensure the development of the joint venture companies, their brands and employees. We are looking forward to the continuous development of the Wahaha joint ventures," Emmanuel Faber, interim chairman of Wahaha joint venture companies, said in a recent media statement.

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Danone and Wahaha started their partnership in 1996 and five joint ventures were established under an agreement that bars the latter from making products that may compete with those of the joint ventures.

The agreement also specifies that the company cannot use the Wahaha brand without Danone's consent.

Wahaha's spokesman Shan Qining told China Daily that Wahaha is determined to see a final resolution of the dispute, no matter how long the lawsuit takes.