| Wahaha steps up legal threat in Danone battle |
SHANGHAI, June 26 -- CHINA'S Wahaha Group has threatened to file a counter claim seeking a huge sum in compensation against French partner Danone Groupe SA, intensifying the increasingly nasty dispute over their 10-year partnership.
"We will apply for an counter claim and could ask for two billion euros (US$2.7 billion), or even five billion euros in compensation," Shan Qining, a spokesman for Wahaha Group, said in a telephone interview, declining to provide additional details.
Paris-based Danone filed an arbitration claim against subsidiaries of Wahaha, China's largest beverage maker, in Stockholm last month under which it sought a reported 800 million euros.
That claim was followed later by a lawsuit in Los Angeles.
Danone accused allegedly illegal companies set up by Wahaha of making competitive products outside of the joint ventures between the two beverage giants, which it said is a violation of a partnership contract signed in 1996.
Wahaha released several contract details yesterday, claiming that the non-joint ventures had the right to use the Wahaha brand.
"The production was given tacit recognition by Danone with annual audits and sales sheets. If they are illegal, why has Danone been keeping silent over the past few years? " Wahaha said in the statement.
"Since the partnership began, we developed every new product ourselves without Danone's participation, and they want to gain profits without taking any risks after our success."
The Hangzhou-based company also claimed Danone was the first to break the contract by investing in several competitor beverage companies, including Shanghai Bright Dairy & Food Co Ltd and the failed Robust Group.
The Chinese company also said its famous brand still belongs to Wahaha Group after a trademark transfer to the joint ventures was blocked by the government.
The feud between Danone and Wahaha surfaced several months ago when Zong Qinghou, former chairman of the joint venture, publicly rejected a plan by Danone to buy out some of Wahaha's assets, accusing the French company of attempting a hostile takeover. Danone officials were not available for comment yesterday.
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