Fight between beverage giants spills out
(Xinhua)Updated: 2007-04-14 20:02
The dispute between Chinese beverage company Wahaha and its French partner Danone took another unusual and very public twist on Friday with the Wahaha president admitting he made mistakes but insisting the original contract he signed isn't valid.
Wahaha's president Zong Qinghou says the original agreement between the two beverage giants was never approved by China's trademark office and so is not in force or effect.
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"We did sign the contract," admitted the president of the Hangzhou-based conglomerate. "At the time, Wahaha was only focused on management concerns and the interests of employees and knew nothing about capital operations."
"My ignorance and breach of duty brought trouble to the development of the Wahaha brand," said Zong.
"Wahaha has fallen into a trap deliberately set by Danone," he said.
The ugly board room dispute spilled into the public domain when Wahaha complained that Danone was putting it in a development straightjacket, while the French company was actively investing in other beverage companies around the country.
Danone says the joint-venture agreement does not allow Wahaha to create new businesses that exclude the French company. Danone says Wahaha has set up a series of independent companies that compete with products made by the joint venture.
Wahaha responds to that allegation, by saying Danone has done even greater damage to the partnership by investing tens of millions of yuan in numerous other competing beverage makers in China.
In Friday's on-line letter Wahaha says, "Danone is trying to force Wahaha to
implement the invalid contract...in defiance of Chinese law."
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