The simmering dispute between Wahaha, one of China’s largest beverage makers, and Groupe Danone, the French food conglomerate, has once again placed the relationship between domestic and foreign joint-venture parties in China under the spotlight.
Similar to a marriage, joint-venture relationships can make for a perfect match at the beginning, only to take a wrong turn, for one reason or another, years later and wind up with one or both parties looking to escape the arrangement. In an effort to avoid the Wahaha and Groupe Danone situation, a well-drafted joint-venture contract should address many of the key concerns of the parties, including proper exit strategies when the joint-venture entities are no longer satisfied with each other’s cooperation.
