The dispute has particular significance for food companies looking to operate in China, as local companies look to assert more control of their operations. Wahaha is China's largest beverage manufacturer and the partnership with Danone is in its eleventh year.
Zong Qinghou, former chairman of Wahaha, at press conference said that the 13 executives who appeared along side him would "absolutely" join him in forming a separate company if Wahaha and Danone's dispute was not resolved.
Danone and Wahaha have worked under an agreement since 1996 regarding a number of locally-based joint ventures, of which Danone holds a 51 per cent stake.
Under this agreement Danone claims it has exclusive rights to use, produce and distribute goods under the Wahaha brands through the joint ventures. However, Danone's attempt to take full control of the ventures has put the two companies at loggerheads.
At the press conference held in Hangzhou, the executives indicated they would leave if a list of demands, which include a commitment from Danone to cease investing in competing Chinese operations and an apology, were not met.
"If Danone apologizes and agrees to remove two restrictive articles, we're still willing to continue the cooperation," said Yang Xiuling, a Wahaha sales executive. "Otherwise we'll see them in court."
The executives are also demanding for Danone to drop its exclusive claim on rights to the Wahaha brand name.
On Tuesday, Danone said it hoped to find an amicable solution and would not consider selling its 51 percent stake in Wahaha.
Danone now faces a struggle to gain control over the joint venture that went astray last year, following corruption allegations against Zong, alleging also that he had formed secret companies run by his relatives with the intention of producing identical products in violation of the corporate agreement.
Zong resigned on 7 June following the allegations and has since publicly accused Danone of damaging his reputation and attempting a hostile takeover.
In an attempt to stem this activity, Danone filed a lawsuit in the US last week against a group of companies controlled by Zong's relatives.
According to France-based Danone, Wahaha is among the most popular beverage brands in China, with annual sales of more than 1.5 billion litres of water alone.
