Danone Says to Sue Founder of China's Wahaha

France's Danone has sent notice to begin litigation against the founder of Wahaha, its partner in China, for what it called a breach of contract, Danone's Asia Pacific President Emmanuel Faber said on Wednesday.

Danone said Wahaha had violated a 1996 joint venture contract by using the well-known Wahaha brand name on products sold separately from the joint venture.

Danone, maker of LU cookies, Evian mineral water and Activia yoghurt, has a 51% stake in a joint venture with Wahaha, based in the eastern Chinese city of Hangzhou.

Danone and Wahaha have fallen into a dispute, with local media reporting that Danone may want to take over Wahaha and stop the Chinese company from using the Wahaha brand without approval from Danone.

The Workers' Union, on behalf of Wahaha and its founding chairman Zong Qinghou, issued a statement on Monday rejecting any effort by Danone to engineer a takeover of the Chinese firm's businesses.

Danone was holding a media briefing to comment on the situation in Shanghai.