Danone is to incur a charge of approximately €450m in its 2004 consolidated accounts in relation to its holding in DS Waters, LLP, the US Home Office Delivery (HOD) joint-venture that it formed with Suntory Ltd in late-2003.

This one-time charge consists of an impairment of its holding in DS Waters and a provision for its related commitment to Suntory.

Slower volume growth patterns for the HOD industry, an increasingly aggressive pricing environment on HOD formats and faster than expected erosion of cooler rental revenues led to the impairment decision, Danone said.

These negative factors have outweighed the cost synergies generated by the combination of Danone and Suntory's HOD businesses.