Yoplait arbitration “could take years” – General Mills CEO

Posted by Josette Dunn on 29th September 2010

General Mills’ dispute over its US licence for the yoghurt brand Yoplait could take years to resolve, the US food giant’s chief executive has said.

The company has filed for arbitration at the International Chamber of Commerce in New York after Sodima, the licencing arm of Sodiaal, one of Yoplait’s owners, said it wanted to end the licence agreement.


Ken Powell, General Mills chairman and CEO, told investors at the company’s AGM that the licencing deal, which has run since 1977, is scheduled to be renewed in 2012 for a further ten years.

However, Powell said Sodima had contacted General Mills earlier this year to renegotiate the deal to secure “more lucrative terms”. He added that earlier this month Sodima then wrote to General Mills seeking to terminate the deal. “The terms of our licence agreement do not priovide for either renegotiation or termination in those circumstances so we have filed for arbitration,” he said yesterday (27 September). “We expect the process to take months, if not years.”

Powell told General Mills’ shareholders that the company was in talks with Sodima. “Our discussions with Sodima are ongoing and we remain hopeful that we will reach a resolution on this matter. Meanwhile, it is absolutely business as usual for our Yoplait division.”

Yoplait is a joint venture between Sodiaal and private-equity firm PAI Partners. The future ownership of Yoplait looks set to change with PAI Partners stating that it wants to sell its 50% stake in the business.

Sodiaal, however, wants to keep a shareholding of some kind and there has been growing speculation over who could be interested in buying part or all of Yoplait.

General Mills has emerged as a reported potential suitor for Yoplait but, in response to a question from a shareholder, Powell refused to be drawn on the issue.

“We have no comment to offer on that possible transaction,” Powell said. However, he added: “We remain very committed to our US yoghurt operations. We’ve built a growing, profitable Yoplait business, with US$1.5bn in net sales, and the future growth for our business and the category are outstanding.”

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