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.

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