Zong Qinghou, a self-made beverage entrepreneur who was once China’s richest person, died on Sunday.
His death was announced by his company, Wahaha Group, which said Mr. Zong had died from an unspecified illness and was 79 years old. The company statement did not provide further details.
Zong’s rags-to-riches story had made him prominent in China even before a public dispute with his foreign business partner considerably raised his profile…and his wealth. He founded a beverage company in the 1980s and, in the 1990s, he partnered with Danone, the French food giant, to launch one of China’s best-known food and beverage brands.
But tensions erupted in 2007 when Danone accused Zong of running secret companies that sold virtually identical products and siphoned up to $100 million from the joint venture.
Zong responded by saying that Danone knew the companies. Vowing to punish Danone for his “bad actions,” he rallied public opinion in China against the foreign company.
The dispute became so acrimonious that French President Nicolas Sarkozy raised the issue in a meeting with China’s leader, Hu Jintao. In 2009, Danone sold its 51 percent stake, giving Mr. Zong’s company full control.
The following year, Forbes named Mr. Zong China’s richest man, with a fortune of $8 billion. He achieved the distinction again in 2012, with 10 billion dollars. Forbes estimated that his wealth has since plunged to $5.9 billion, putting him at No. 53 on last year’s list of China’s billionaires.
He is survived by his wife, Shi Youzhen, and his daughter, Zong Fuli (also known as Kelly Zong), who is the president of Hangzhou Wahaha Group and Mr. Zong’s successor.
Mr. Zong, who grew up poor, was known for a Spartan lifestyle. In interviews, he said that he arrived at the company’s headquarters before 7 am and worked until 11 pm. He said he had no hobbies, other than smoking and drinking Lipton tea.
According to various accounts, he was born in October or December 1945 (his company may have used a traditional Chinese method of counting ages in which a person is considered 1 year old at birth) in or near Hangzhou, a city near Shanghai. He was among many young men sent to the countryside during the Cultural Revolution and spent years working in an agricultural commune.
He became a street vendor in 1978, the same year that the country’s new leader, Deng Xiaoping, began ushering in an era of capitalism. About a decade later, Zong opened a stand near an elementary school, selling soft drinks and frozen treats.
Seeing hungry children passing by prompted him to invent a vitamin drink, which he called Wahaha Oral Liquid. “He solved the problem of children who did not want to eat and suffered from malnutrition,” he said in an interview with the BBC.
Soon after, the Hangzhou Wahaha Group (“Wahaha” loosely translates as “laughing boy”) was born, selling bottled water, soft drinks and teas. It later expanded into infant formulas and children’s clothing.
In 1996, it partnered with Danone, the French food company best known for its yogurt, forming the Wahaha joint venture. Selling yogurt drinks, carbonated drinks and food products, it had amassed 15 percent of China’s beverage market by 2012, behind only Coca-Cola and Tingyi Holdings.
After Danone accused Mr. Zong of misconduct, he fired back with an open letter, accusing Danone of spreading lies about his company’s business practices and defaming his family. Wahaha officials organized demonstrations and press conferences denouncing Danone officials as “rogues.”
Danone ended up selling its stake for about $500 million, far less than analysts believed it was worth.
The breakup sent a chill of fear through multinationals, particularly in sectors like auto manufacturing, where the Chinese government required joint ventures and limited foreign companies’ stakes to 50 percent.
But it proved more of an isolated episode than a bellwether and, in retrospect, a mere blot on an otherwise happy era. In recent years, multinationals have encountered other, much more challenging obstacles.
Rising geopolitical tensions have led to waves of sanctions between China and the United States. Nearly three years of “zero Covid” lockdowns and other measures severely damaged the production and sales of many companies. And China’s state security agencies have become quicker in shutting down foreign companies they are concerned about, particularly due diligence firms.
“It was a high-profile case that caught people’s attention,” Ker Gibbs, former president of the American Chamber of Commerce in Shanghai, said of the Danone episode. “But if we look back now, it is clear that the general environment in that period was quite stable and friendly to foreign companies.”