French dairy giant Danone has started legal action against the chairman of Wahaha, its Chinese partner, over alleged breaches of the groups' joint venture agreement.

Danone holds a 51% stake in its joint venture with Wahaha, which accounted for about 5% of Danone's operating profit last year.

A dispute arose between the two groups because, according to Danone, Wahaha chairman Zong Qinghou has established factories and a sales company that produces and markets the same products as those covered by the joint venture agreement.

According to Danone, Zong's Hangzhou Wahaha Food and Beverage Marketing Company illegally sells products under the Wahaha trademark without proper authorisation.

A spokesperson for Danone told just-food that the group still hopes the disagreement will be settled out of court.

"We hope that the dispute will be ended through discussion and negotiation. One way or the other, we expect it to be settled in the next 30 days," the spokesperson said.

Danone has said that it is unwilling to comment further on the issue as discussions between the parties are ongoing.