Danone in China

Danone has lost an important part of its legal battle with a Chinese partner after a local arbitration body ruled in favour of Wahaha Group in a dispute over the joint ventures main brand.


The two companies first signed a partnership in 1996 and since then the joint venture, in which Danone has a 55 per cent stake, has turned Wahaha mineral water into the market leader in China and one of the best-known consumer brands in the country.The row partly revolves around the issue of which company owns the rights to use the Wahaha brand name. In the initial 1996 joint venture agreement, Wahaha Group agreed to transfer the trademark to the new company.However, when the dispute erupted earlier this year, Wahaha Group alleged that the transfer agreement had been rejected at the time by the local government, which meant the brand name was never actually controlled by the joint venture. The Hangzhou Arbitration Commission, based in Wahaha’s home town, accepted the company’s request that the transfer agreement be terminated.Danone said the commission had made a “wrong” decision which “ignored fundamental facts” about the case. The group said that the local trademark office had made it clear that the trademark transfer agreement was never actually rejected.

Well, if Danone didn’t see this coming, too bad.  The big boys got to know how to take care of himself .. be savvy ..  On the other hand, I always felt China is learning (or using this as the short cut) the worst part of capitalism.  Pls play by the rules.  If they felt they were wronged or humiliated (the Chinese boss even evoked the Boxers Rebellion at press conference, etc. .. oh gosh, a little over board? … ) by the West in the 19th century, it’s the misunderstanding of the culture, too weak to defend itself.  No one is going to hand you a cake on the silver plate.  You signed a treaty, you have to rectify it.  Not knowing the law, doesn’t give you the right to commit fault .. Would you particiapte a sport when you don’t know the rules?  But China is too big and important to be ignored, so, she can get away with murder from time to time.

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