Wellington, Sept 1 NZPA - French food manufacturer Groupe Danone SA has moved to dampen down speculation that a sale of its New Zealand beverage group Frucor is looming.

But it has confirmed that a review of the company has been initiated.

The Bloomberg newsagency reported late last week that Danone had appointed J P Morgan to advise on the sale of its New Zealand drink brands, including energy drink V and Just Juice.

The V business was reported as likely to be sold to Coca-Cola Amatil Ltd -- whose adviser on the deal was Citigroup -- and the remaining drinks assets to another buyer.

"Over the last six years, Frucor has played an instrumental role in the development of Danone's strategy for beverages," the company said in a statement.

In light of the group's recent refocus on "purity and naturality" in its waters division, Danone was conducting a thorough review of all potential long-term strategic options for Frucor "to ensure ongoing value-creation for all its stakeholders".

The second largest beverage company in New Zealand, Frucor is one of the market leaders in the trans-Tasman energy drink and water sectors.

In addition to V, Mizone, V, H2Go and Evian are among the high-profile brands, and the company also bottles Pepsi, 7Up and Mountain Dew in New Zealand.

Danone also owns the Griffins business in New Zealand.

New Zealand's Frucor Beverages Ltd was originally sold by the New Zealand Apple and Pear Board subsidiary EnzaFruit. Controversially, it decided not to return $25 million in proceeds to growers, but used it to pay off foreign exchange losses and costs of its failed investment in Omniport, a spiral container loader.

Shortly after, Frucor was listed on the New Zealand sharemarket, and within a year Danone fronted up with an offer to buy all its shares for $235 million. It delisted the company and expanded it into Asia.

Analysts now say that the V brand alone may be worth $800 million because it has 60 percent of energy drink category in New Zealand market and 50 percent in Australia.

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