Danone's China troubles run deeper

China may make for an increasingly enticing new market, but that doesn't mean the experience of doing business there is necessarily a pleasant one. Just ask Danone. The French firm's wrangle with the sunnily-named Wahaha is proving even more protracted than countryman Thierry Henry's ‘will he, won't he' Barcelona transfer saga.

Last Updated: 06 Nov 2012
Only a week after Chinese customs seized a load of Evian water, owned by Danone, on the grounds that it contained harmful bacteria, the Hangzhou Wahaha Group is now taking a trademark dispute with Danone to arbitration. The group agreed in 1996 to transfer the Wahaha brand to a joint venture with Danone, but is now claiming the Chinese state trademark office never recognised the venture.

It has been a tumultuous partnership, and the accusations have been flowing as freely as the protagonists' product. Which, incidentally, is more freely than Danone would want: it recently filed a suit against Wahaha for illegally selling bootlegged beverages. The saga provides a sobering lesson that other ambitious companies would do well to heed: doing business in China can involve navigating some extremely choppy waters.

Find this article useful?

Get more great articles like this in your inbox every lunchtime


Get your essential reading delivered. Subscribe to Management Today