FRANCE/JAPAN – Two of the world’s foremost functional dairy food manufacturers – Yakult and Danone – have formed a new alliance to try and keep ahead in the increasingly crowded probiotic market.

As part of the deal, two Danone representatives will be put forward to sit on the Yakult board and one Yakult member will put forward for Danone’s board. Also, the companies will create a ‘liaison office’ designed to run joint projects in research and development and entry into new markets.

The deal also includes the creation of the Global Probiotics Council, which will work to promote the benefits of probiotics bacteria to consumers, regulatory authorities and the scientific community.

Danone, which already holds a 20% stake in Yakult, has agreed that it will buy no further shares for five years and will not try to buy a majority stake in the next ten years.

Commenting on the deal, Yakult Honsha president Sumiya Hori said: Yakult Honsha has world leading technology in probiotics and a unique distribution system, while Danone has established global presence and marketing expertise. The primary goal of this alliance is to strengthen Yakult Honsha and Groupe Danone’s global leadership in probiotics.” Also this week, Danone said that it has sold its 10.1% stake in Australian dairy firm National Foods. The company bought the shares in June 2002.