French food giant Danone has said that it is in "ongoing talks" with its Chinese joint venture partner over the future leadership of the business.

A bitter row erupted between Danone and its Chinese partner Wahaha when the French company accused the group's chairman Zong Qing Hou of setting up a parallel business to manufacture, sell and market products covered by the joint venture agreement.

Having filed a lawsuit against Zong, Danone announced yesterday (7 June) that he had resigned his position at the helm of the venture.

In an open letter to Danone CEO Franck Riboud, which was widely published in the Chinese press, Zong accused the French food group of forcing his resignation. "I can no longer endure the slander and tyranny of the two managers appointed by Danone, which has profoundly hurt (his) reputation and feelings," Zong wrote.

Accepting Zong's resignation, Danone appointed Emmanuel Faber as the interim chairman of the joint venture companies. However, Wahaha reportedly said today that it would not accept Danone's choice of chairman.

When approached by just-food, Danone confirmed that talks between the two factions were "ongoing" but declined to comment on the apparent escalation of hostilities between the companies.

"We believe a settlement that is acceptable to all interested parties can be reached," a spokesperson for Danone said today.