Danone says Wahaha Joint Ventures chairman resigned

PARIS, June 7 (Reuters) French food group Danone said on Thursday the chairman of Chinese Wahaha Joint Ventures, with which it is in a legal dispute, had resigned.

His resignation follows allegations by Danone, maker of Evian bottled water, Activia yoghurts and Lu biscuits, that Qing Hou Zong violated a contract by using the Wahaha brand name on products sold outside the joint venture.

In a statement, Danone said Wahaha Joint Ventures Vice Chairman Emmanuel Faber, who also heads Danone's Asian operations, would temporarily replace Zong.

Danone owns 51 percent of a joint venture with Wahaha, China's largest beverage company, which is based in the eastern Chinese city of Hangzhou.

''Danone has been in contact with the Hangzhou government on the matter of management continuity at the Wahaha Joint Ventures and trusts (the) government will continue to show support for a smooth management transition, both as regulatory authorities and as a significant minority holder in the Joint Ventures,'' it added.

Danone said on Tuesday it filed a lawsuit in California, against its joint venture partner Wahaha, for alleged breach of a 1996 contract by using the Wahaha brand on products sold outside the joint venture.

In an open letter to Danone Chief Executive Franck Riboud, sent to reporters by e-mail, Wahaha's Zong Qinghou said he had resigned because of the behaviour of Danone's two directors in the joint-venture, which he said had greatly hurt his reputation and feelings.

Danone was not immediately available to comment on this.

Danone shares rose 0.4 percent to 57.37 euros by 1134 GMT, outperforming a 0.5 percent drop in the DJ Stoxx food and beverage index.

REUTERS PV VC1953