The future of the joint yoghurt venture between Chinese food producer Shanghai Dairy Corp and French giant Groupe Danone was up in the air on Wednesday (18 October) as officials at Shanghai Dairy admitted that the companies were "in the middle of negotiations."

Speculation has abounded since Monday (16 October) when an executive from the French dairy, water and biscuits company arrived to discuss the possibility of stock transfer to the Chinese partner. And this despite the fact that in mid-September, Danone's chairman Franck Riboud told a magazine that the company saw China as a top priority.

Danone controls seven other units in China, one of which also produces yoghurt, but this cannot beat "Bright," the own brand yoghurt of Shanghai Dairy, which commands a larger market share. The joint venture has been operating for eight years to build on an investment of US$4.4m.