After Bright Dairy put an end to its cooperation with Danone on October 16, another local diary company, Mengniu, also announced its breakup with the French food group on December 18 after only a one-year tie-up.

Previously Mengniu and Danone reached an agreement on December 18, 2006 to set up three joint ventures to cooperate in the yogurt sector covering Inner Mongolia, Beijing and Ma’anshan of Anhui Province. Mengniu agreed to hold 51 percent of the stake in the three joint ventures and Danone held the remainder.

According to the agreement, the two would terminate their cooperation if preconditions were not created for further investment before the agreed date of December 18, 2007.

However, the closure of any specific joint ventures would not affect future cooperation, the two parties said.

Analysts said the termination of cooperation indicates that Danone is changing its China strategy by possible sole-investments in its own core businesses, such as dairy products, instead of setting up joint ventures with Chinese partners.

For more details, please read the full story in Chinese (http://www.cs.com.cn/cqzk/05/200712/t20071220_1264166.htm).

(China.org.cn December 20, 2007)