U.S. News

Head of Danone Joint Venture to Meet Media

The new chairman of Groupe Danone's troubled China joint venture can expect a "hostile reception" when he arrives for work, a spokesman for the venture's Chinese partner was cited as saying.

The threat comes as Emmanuel Faber, appointed last week to replace Zong Qinghou, planned to meet with reporters on Tuesday, the French dairy and beverage maker said.

Zong quit abruptly just days after Danone filed a lawsuit in Los Angeles over alleged illegal sales in China by companies it said are run by Zong's relatives.

Danone has accused Zong's company, Hangzhou Wahaha, of illegally selling products identical to those sold by the companies' joint ventures in violation of agreements.

Zong lashed back in an open letter to the media, accusing board members of Paris-based Danone of "insulting and framing" him.

Zong's departure left Chinese employees feeling "uneasy and furious," the official Xinhua News Agency cited Wahaha spokesman Shan Qining as saying on Monday.

"The new interim chairman ... can expect a hostile reception when he shows up to work here," Xinhua reported Shan as saying from Wahaha's headquarters in Hangzhou, west of Shanghai.

Wahaha employees have signed a petition supporting Zong and want assurances from Danone about the future of the company and the security of their jobs, Shan said. Calls to Shan's office rang unanswered Tuesday.

A brief notice from a public relations firm hired by Danone said Faber planned to meet with reporters at the company's Shanghai offices in the afternoon, but gave no details on what he planned to discuss.

Faber, president of Danone for the Asia-Pacific, had earlier called Zong irresponsible for disclosing the dispute to the media.

Danone and Wahaha established their first joint venture in 1996, growing into one of China's largest beverage operations.

However, relations turned sour several months ago after Zong publicly rejected a plan by Danone to buy out some of Wahaha's assets, accusing the French company of attempting a hostile takeover.