Soft-drinks tycoon who was once said to be China’s richest man
ZONG QINGHOU, who has died aged 78, was a soft-drinks tycoon who was reported for a time to be the richest man in China.
Zong’s company, Wahaha (which means “laughing child”), was a major distributor of milk- and tea-based beverages, and controlled almost a quarter of China’s bottled water market. Its success was built on a partnership signed in 1996 with Danone, the French foods group – hailed at the time as a showcase joint venture between Chinese and western interests – to distribute Wahaha products throughout China.
The deal made Zong a fortune estimated in 2010 at $8 billion, placing him for a couple of years at the top of a growing list of Chinese billionaires.
But by then the deal with Danone had gone sour. After repeated attempts to wrest management control from Zong, the French company accused him of secretly running parallel operations manufacturing virtually identical products and siphoning many millions of profits into offshore companies.
In the very public battle that followed, Zong denounced Danone as “imperialists” and “bandits”, while Wahaha distributors and employees boycotted own-brand Danone products. The French company filed for arbitration in Stockholm and sued companies controlled by Zong’s wife and daughter in the United States.
The affair came to be discussed between presidents Hu Jintao of China and Nicolas Sarkozy of France, both governments bringing pressure on the parties to find a settlement. Zong resigned as chairman of the joint ventures in 2007 and two years later Danone sold its interest back to Wahaha for an estimated $500 million.
Zong Qinghou was born in poor circumstances at Suqian in Jiangsu province on November 16 1945. Having dropped out of school to help support his family, he was sent during Mao Zedong’s cultural revolution to work in a salt factory on Zhoushan island, south of Shanghai, where he stayed for 15 years.
In 1979 he rejoined his mother, a retired teacher, at Hangzhou and found work as a soft-drinks salesman. Having taken over a small shop selling drinks and ice cream to schoolchildren, in
1989 he raised a loan to buy a canning factory and began to market a milk-based drink with supposed nutritional benefits under the Wahaha brand.
Despite his fortune, Zong maintained a plain and frugal image. His language was earthy, he dressed like his workers (though he sported an expensive Swiss watch) and he ate in the company canteen. He liked to tell interviewers that his only hobbies were smoking cigarettes and drinking tea.
“For a long time, I couldn’t even afford food and clothing… I climbed from the very bottom of society,” he said. “Rich people should help everyone to become prosperous. If everyone is wealthy, society will be harmonious, and more comfortable.”
But his claim to live on a remarkably modest income was somewhat marred by allegations of large-scale tax evasion – and at one stage he secured permanent resident status in the US, apparently to enable him to travel freely and look after his investments there.
He was, nevertheless, honoured in his homeland with titles such as “national excellent entrepreneur” and “outstanding builder of socialism with Chinese characteristics” and served for 16 years as a delegate to the People’s Congress.
In 2013 Zong was wounded in a knife attack by an unemployed man who accused the tycoon of refusing to offer him a job. In the same year Zong declared that he had turned down meetings with David Cameron and the Queen during a trip to the UK but (as the Telegraph reported) “offered no evidence to support those claims”.
He married Shi Youzhen and they had a daughter, Fuli (Kelly) Zong, who became president of Wahaha.