The Internal Trade Department has appealed to all retail outlets and department stores not to hike the prices of Nescafé instant coffee, after the Nonthaburi Civil Court issued an injunction on Wednesday for Nestlé Thailand, the sole owner of the Nescafé brand, to suspend production, distribution and import of Nescafé instant coffee.
The court’s injunction is in response to a plaint for protection filed by Chalermchai Mahagitsiri, a shareholder in Quality Coffee Products Company.
Nescafé instant coffee has been produced in Thailand since 1990 by Quality Coffee Products, a 50:50 joint venture between Nestlé and the Mahagitsiri family, on the condition that Nestlé has authority over the management, production, distribution and marketing of Nescafé products, with Nestlé holding the patent for Nescafé instant coffee.
In 2021, Nestlé officially notified Quality Coffee Products of the termination of the contract for the Thai company to produce Nescafé instant coffee. The termination took effect in December last year, following a ruling by the International Court of Arbitration.
Following that ruling, however, the shareholders of both Nestlé and Quality Coffee Products could not agree on future operations or the future of Quality Coffee Products, prompting Nestlé to seek an order from the Bangkok South Civil Court on March 14th to dissolve Quality Coffee Products Company. The case is pending with the court.
Reacting to the court’s injunction, Nestlé said it will file a protest note with the court against the injunction, claiming that it was not given the opportunity to defend itself in court.
The company said, however, that it respects the Thai law and will comply with the court’s order.
In its statement, Nestlé said it is concerned over the impacts of the on small retail outlets, as well as coffee vendors, who may not be able to buy Nescafé instant coffee, as well as coffee and dairy farmers.
Nestlé claims to haves invested more than 22.8 billion baht in Thailand since 2018.
