The head of Danone’s ventures in China has quit, lengthening the shadow over the company’s business in the country.
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Zong Qing Hou, chairman of Wahaha Joint Ventures, has resigned from the position, Danone said today (7 June).
Zong’s resignation comes amid a legal battle between the executive, Danone and the French group’s Chinese venture partner, Hangzhou Wahaha Food and Beverage Sales Co.
Earlier this week, Danone started legal action in the US against the owners of its Chinese associate, claiming that the company has been violating their venture agreements.
Danone alleges that the Chinese firm is selling food and beverage products identical to those sold by the ventures between the two companies.
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By GlobalDataThe litigation comes a month after Danone issued a writ against Zong, who heads Hangzhou Wahaha Food and Beverage Sales Co., over alleged breaches of the joint venture agreements.
Danone executive Emmanuel Faber will replace Zong as chairman of the joint venture companies. Faber said he hopes it will be business as usual at the Chinese ventures.
Faber said: “Danone’s objective has been, and will always be to ensure the development of the JV companies, their brands and employees.”
Danone said it has held discussions with the local government in Hangzhou over the future management of the ventures. “Danone trusts that government will continue to show support for a smooth management transition, both as regulatory authorities and as a significant minority holder in the joint ventures.”
