Wahaha Rejects Danone’s Cooperation Plan

Beverage firm Wahaha Group has rejected a cooperation plan put forward by food group Danone to end their long-standing dispute. Wahaha said that the discussions have hit an impasse.

Danone offered a proposal, according to which, both the companies merge all their businesses to be listed as one entity. The company also asked Wahaha to guarantee that the value of Danone’s share of the listed firm will not fall below $7 billion. However, Wahaha rejected these proposals terming them as unacceptable.

Danone has accused Wahaha of setting up independent companies and selling products alongside their joint venture that sells Wahaha branded products such as soft drinks and bottled water.

Since May 2007, the two companies have filed many complaints and lawsuits against each other. In December 2007, they agreed to cease all lawsuits and enter into talks to resolve the dispute. The deadline for their discussions will expire at the end of March 2008.

Reuters quoted Zong Qinghou, group chairman of Wahaha, as saying: “If we don’t reach an agreement, then we have to go back to the courts to decide.”