Danone mum about mainland profit dispute

Danone chairmen and Wahaha Group, China's biggest drink company, are entangled in a legal dispute over the joint venture and the use of the Wahaha brand. The French food producer, according to its chairman Franck Ribound, might have to absorb the negative impact arising from the dispute as a result of higher raw materials.

Though net profit surged 8.1% and sales grew 8.6% annually in the six months, the dispute has caused Danone's shares to slump by 5% in France in 2007, after almost doubling the past two couple of years. The French food maker posted losses of US$25 million monthly as its estranged Chinese partner put for sale its jointly developed products on the sly through independently set-up companies.

This case is gaining precedence as the authorities are beginning to take this matter seriously. With a looming lawsuit against related parties to Wahaha's former chairman, Zong Qinghou, the latter hoped the dispute will be settled amicably. CEO of Groupe Danone, Franck Ribound, declined to comment on the details and solutions with respect to the dispute.

In a separate statement yesterday, Danone confirmed a reshuffling of the group's senior management from the beginning of next year, following its planned buyout of baby food manufacturer Numico. The start of next year will see deputy chairman and chief operating officer Jacques Vincent heading to a new strategic committee whilst co-chief operating officers Bernard Hours and Mr Faber will be in charge of the group鈥檚 business division and corporate activities respectively. In addition, Mr Faber will remain chairman of Danone's Asia-Pacific division and retain responsibility for water and beverages in the region.