Danone in second Chinese lawsuit

H&J Vanguard, a Beijing-based consultancy that owns a percentage of Bright Dairy & Food, has employed a law firm and is about to deliver a notice to Danone for allegedly causing hostile competition and hurting other shareholders by investing in multiple Chinese beverage companies.

This move comes in the midst of the legal dispute with Wahaha, China’s largest beverage producer.
H&J Vanguard claims to have consciously chosen this time to attempt an impact on the dairy giant. The company is calling upon other shareholders of companies with Danone’s investment to file collective lawsuits against Danone. Bright Dairy has said the move is only by individual shareholders and not representative of the major shareholders.
Danone, which holds a 51% stake in 39 joint ventures with Wahaha, also owns 92% in Robust, 49% in joint ventures with Mengniu Dairy, 50% in Shanghai-based Aquarius, and 24.32% in Huiyuan Beverage and Food.
Danone has accused Wahaha of setting up unauthorized independent companies and selling products identical to those of the joint ventures, in violation of a 1996 agreement.