French food and beverage major Groupe Danone SA yesterday said it has filed a
lawsuit in the United States against two companies involved in its dispute with
its joint ventures partner Wahaha, China's largest beverage company.
Accusing its Chinese partner of illegally using the Wahaha brand without
consent, Danone took Ever Maple Trading Ltd and Hangzhou Hongsheng Beverage Ltd,
and two people connected with the companies, to the Superior Court of
California's County of Los Angeles on Monday, Danone said in a statement
Hangzhou Wahaha Food & Beverage Sales Ltd, accused by Danone of selling
products competing with those produced by the joint ventures, is a wholly owned
subsidiary of Hangzhou Hongsheng, which is controlled by the British Virgin
Islands-registered Ever Maple, according to the statement.
The lawsuit came after Danone took the matter to an international arbitration
body and as its negotiations with Wahaha seem to be going nowhere.
"Hangzhou Wahaha Food and Beverage Sales is illegally selling products which
are the same as those sold by Wahaha joint ventures and is making unlawful use
of the joint ventures' distributors and suppliers," Danone said in the
The lawsuit is aimed at curbing the collective conspiracy of the defendants,
who might adopt devious measures to damage the joint ventures' relations with
customers and their business prospects, the world's largest yogurt maker said.
Danone and Wahaha set up the first group of five joint ventures in 1996 under
an agreement that bans the Chinese partner from selling products that compete
with those made by the ventures or using the well-known Wahaha brand without
But the Paris-based company recently claimed it had found that Zong Qinghou,
founder of Wahaha, had set up companies outside the joint ventures to produce
Ever Maple, launched in January 2003 with Zong's daughter as legal person, is
one of a handful of offshore companies that invested in the non-joint ventures.
Hongsheng was founded in October 2003 with 1.5 million yuan and 50 employees.
Zong's daughter held the position as legal person in this organization as well.
Zong had caused a flutter in business circles by accusing his French partner
of trying to acquire its assets beyond joint ventures for 4 billion yuan and
called for protection of the domestic brand.
Danone had threatened to adopt legal proceedings against its Chinese partner.
The company and its subsidiaries have also proposed eight arbitration
applications to the Arbitration Institute of the Stockholm Chamber of Commerce.