NationThailand-Apr 10
Thai retailers fear shortages following legal injunction against Nestlé in ongoing dispute with former manufacturer. Retailers across Thailand are bracing for a potential shortage of Nescafé instant coffee after a court order temporarily halted its production, manufacturing, sales, and importation into the Kingdom.
The Minburi Civil Court issued a temporary injunction on April 3rd, 2025, prohibiting Nestlé, the sole proprietor of the Nescafé brand, from engaging in any business activities related to Nescafé products in Thailand. The order came following legal action initiated by Chalermchai Mahagitsiri, a shareholder in Quality Coffee Products (QCP), the former Thai manufacturer of Nescafé.
The court’s prohibition has sparked fears of widespread shortages across various sales channels, from major supermarket chains to small independent shops and mobile street vendors. Milin Veerarattanaroj, chairman and managing director of Tang Ngee Soon Superstore, a major wholesale and retail operator in Udon Thani province, warned that even a three-day absence of Nescafé products would cause substantial losses. Tang Ngee Soon generates between 300 to 400 million baht annually from Nescafé sales. The company now fears panic buying as retailers from neighboring provinces rush to secure dwindling supplies. Despite these concerns, the Ministry of Commerce has offered assurances that a nationwide shortage is not anticipated. The conflict stems from Nestlé’s termination of its agreement with QCP, which had manufactured Nescafé in Thailand since 1990. Nestlé claims the termination, which took effect on December 31st, 2024, was legally sound and backed by a ruling from the International Court of Arbitration. QCP was established in 1989 as a 50/50 joint venture between Nestlé and the influential Mahagitsiri family. Under this arrangement, Nestlé held authority over management, production, distribution, and marketing of Nescafé products, with the manufacturing technology being Nestlé’s intellectual property. After the agreement ended, the shareholders couldn’t reach a consensus on QCP’s future operations. On March 14th, 2025, Nestlé S.A. filed a petition with the Bangkok South Civil Court seeking QCP’s dissolution. Nestlé claimed it wasn’t given the opportunity to present its case before the injunction was issued but stated it respects the law and is complying with the court’s directive. The company is now filing an objection and submitting comprehensive information to the Minburi Civil Court. Nestlé emphasized its commitment to resolving the situation and is pursuing legal avenues to overturn the temporary injunction. Nestlé highlighted its 130-year presence in Thailand, noting investments of over 22.8 billion baht between 2018 and 2024, and affirmed its commitment to ongoing investment in the Kingdom. Read more at:
