Creating a stir in instant coffee

The legal battle over control of Nescafé could affect how foreign firms look at partnerships here and unleash competitors.

- KUAKUL MORNKUM

The ongoing legal battle between Nestlé, the Swiss multinational food and drink processing conglomerate, and the Mahagitsiri family -- widely dubbed the “Nescafé czardom” of Thai media -- is causing a stir in Thailand’s instant coffee market. Earlier this month, Nestlé was ordered by a Thai court to stop manufacturing, outsourcing production, distributing, or importing instant coffee products using the Nescafé trademark in Thailand.

A few days later, the Central Intellectual Property and International Trade Court reinstated Nestlé’s right to use the trademark for its registered goods as of April 11, 2025.

The situation has shifted again, and it is uncertain whether the issue has been fully resolved.

WHAT’S THE SOURCE OF THE CONFLICT?

According to Nestlé (Thailand), Nescafé’s was manufactured in Thailand from 1990 to 2024 through a 50:50 joint venture called Quality Coffee Products Ltd (QCP) owned by Nestlé and the Mahagitsiri family, including patriarch Mahagitsiri.

Nestlé had management control of operations, production, sales and marketing, and the manufacturing technology used was Nestlé’s proprietary intellectual property.

Nestlé decided to terminate its manufacturing licence agreement with QCP in 2021, according to legal documents.

The QCP joint venture agreement and the associated Nescafé licensing agreement as well as the related contract framework were terminated on Dec 31, 2024.

As a result, QCP no longer had the right to manufacture Nescafé products and the contract termination was validated by an arbitral award of the International Chamber of Commerce’s International Court of Arbitration in Singapore, notes Nestlé’s statement.