FRENCH food giant Danone has ended three separate joint ventures with China's Mengniu Dairy Group as talks aimed at further cooperation failed.

Danone, the global leader in the dairy industry, called off the joint venture with Mengniu just one year after the two teamed up to create the three joint ventures with a combined investment of about 1.6 billion yuan (US$216.73 million) in December 2006.

The joint venture, in which Mengniu held 51 percent and Danone 49 percent, called for the companies to manufacture, develop, distribute and sell yoghurt products in China.

Mengniu is China's largest yoghurt maker.

"Both sides agreed that conditions for further investment in the year-old joint venture had not been met," Zhao Yuanhua, spokesman of Mengniu, said today. "We failed to reach agreement for further investment."

"Both parties have also agreed that the termination of the joint venture will not affect future cooperation opportunities such as the co-packaging and distribution of yogurt under the BIO brand," Danone said in a statement yesterday.

Danone is also embroiled in a protracted legal battle with another joint venture partner in China, Hangzhou Wahaha Group Co, over rights to the local brand.

In October, United States fast-food giant Kentucky Fried Chicken (KFC) signed a dairy product agreement with Mengniu, ending a two-decade local tie-up with Nestle.

This was not the first time that Inner Mongolia-based Mengniu Dairy replaced Nestle as a supplier for multinational food companies in China.

In June, it took the place of Nestle as liquid milk supplier for US coffee chain Starbucks.