The aroma of Nescafé has wafted through Thailand for over half a century, becoming a staple in the country’s coffee culture. Nestlé, the Swiss food giant behind the brand, has enjoyed unparalleled success with Nescafé, but this enduring presence faced a sudden threat due to a legal dispute with the Mahagitsiri family, Nestlé’s long-time partners in Thailand.

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The roots of this conflict can be traced back to Nestlé’s decision in 2021 to end its agreement with Quality Coffee Products (QCP), a joint venture with the Mahagitsiri family responsible for manufacturing Nescafé in Thailand. The termination of this decades-long partnership led to a legal battle culminating in a court order halting Nescafé production and sales in Thailand.

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Chalermchai Mahagitsiri, a key shareholder in QCP, took legal action against Nestlé, resulting in a significant victory for the Mahagitsiri side with a court-ordered injunction against Nestlé’s activities related to Nescafé production in Thailand.

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Nestlé’s journey with Nescafé dates back to 1929 when the company responded to Brazil’s surplus of coffee beans by creating a quick and easy coffee preparation method. The launch of Nescafé in 1938 marked the beginning of a global coffee empire that has stood the test of time, with Nescafé becoming an iconic brand synonymous with instant coffee.

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In Thailand, Nestlé introduced Nescafé over five decades ago, building its brand image alongside the famous “Red Cup.” The partnership with the Mahagitsiri family, starting in 1990, was instrumental in Nescafé’s success in Thailand, with the Mahagitsiris playing a pivotal role in the brand’s dominance in the market.

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The financial impact of the Nescafé dispute is significant, with Quality Coffee Products reporting substantial revenues and profits in recent years. The Thai coffee market, valued at billions of baht, is a lucrative industry where Nescafé has long reigned supreme, particularly in the in-home and ready-to-drink segments.

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However, the legal battle between Nestlé and the Mahagitsiri family has thrown Nescafé’s market leadership into uncertainty, posing a formidable challenge to its longstanding position in Thailand’s coffee market. The outcome of this dispute could reshape the landscape of the coffee industry in the country and have lasting implications for both parties involved.

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