Shares in Chinese dairy giant Mengniu fell almost 4% today (19 December) in reaction to the end of the company’s local venture with French food giant Danone.
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Mengniu and Danone had joined forces last year to produce and distribute fresh dairy products for the Chinese market.
However, the companies agreed to pull the plug on the venture as conditions for further investment in the business had not been met.
“Both parties have also agreed that the termination of the joint venture will not affect future cooperation opportunities such as the co-packing and distribution of yogurt under the Bio brand,” Danone said.
Danone is looking to operate on its own in China’s booming dairy market. In October, the company sold its stake in Bright Dairy and Food Co., another leading Chinese dairy processor.
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By GlobalDataAnother of Danone’s partnerships in China, a venture with drinks maker Wahaha, has turned sour. Danone has accused its partner of selling drinks under the Wahaha trademark outside the venture without permission.
