The now famed conflict between Groupe Danone, a French food and beverage giant, and Wahaha Group, China's largest drink maker, has caused a marked drop in their joint venture businesses' profit margins. Danone indicated in its first half-yearly financial report that Danone-Wahaha joint venture sales would drop sharply in the second half of 2007 due to the litigation.
According to this report, Danone's beverage business reaped 2.139 billion euros in the first half of 2007, up only 4.7 percent over that in the same period of 2006, indicating a major slowdown.
In addition, the joint ventures, Groupe Danone's most important investment in China, only netted the company 1.2 billion euros in sales, accounting for 7 percent of its total turnover. An insider estimated the company could see as much as 33 percent drop in sales because of the ongoing dispute between the two companies.
For more details, please read the full story in Chinese. (http://www.bbtnews.com.cn/news/channel/political25039.shtml)
(China.org.cn August 1 2007)
