Nestlé moves to split assets from Mahagitsiri family in QCP dispute
Nestlé has filed a lawsuit with the Bangkok South Civil Court to halt the operations of Quality Coffee Products (QCP) to separate its assets from those of the Mahagitsiri family.
Representatives from Nestlé confirmed to The Nation that the lawsuit was filed prior to the Mahagitsiri family’s application for a temporary injunction at the Minburi Civil Court. The injunction followed the parties’ failure to reach a consensus regarding the future of their joint venture related to the production of the Nescafé brand.
Shareholders on both sides have been unable to reach an agreement regarding QCP’s future operations for an extended period. As a result of this prolonged deadlock, the contract was terminated, the representatives explained, confirming that Nestlé had provided the Mahagitsiri family with two years’ advance notice.
Discussions on the possibility of continuing the business partnership included several options, such as Nestlé expressing interest in acquiring shares from the Mahagitsiri family. Looking ahead, the company also intends to explore a new business model that does not rely on contract manufacturing.
“This is not a bankruptcy filing, but rather a petition to dissolve QCP,” a Nestlé representative clarified. “It’s akin to a divorce—when a couple separates, assets must be divided. In this case, the assets include buildings, machinery, and cash, all of which will be split so that both parties can pursue their respective investment strategies.”
Nestlé’s termination of the joint venture’s licensing agreement was carried out in accordance with the contract and was legally upheld by an international arbitration tribunal.
The original licensing agreement was set for a term of 12 years, with provisions for three extensions subject to shareholder consensus. Representatives clarified that Nestlé and QCP had been in partnership for the production of Nescafé in Thailand for over 40 years.
Nestlé retains full legal rights to produce, outsource, sell, or import instant coffee products. A representative added that the Mahagitsiri family, which holds a 50% stake in QCP, has been receiving annual investment dividends.
As QCP is no longer able to manufacture Nescafé products, and in order to prevent a shortage in the market, Nestlé has resorted to outsourcing production (OEM) to other companies, as well as importing Nescafé.
“Currently, the proportion of imported Nescafé products exceeds that of domestically produced ones, as local outsourcing cannot meet demand. The original producer is no longer able to manufacture the products. However, we confirm that the imports are only a temporary measure,” the representatives said.
The representatives reiterated the company’s commitment to supporting Thailand’s supply chain through local sourcing of partners and suppliers, as well as through corporate social responsibility (CSR) initiatives.
Nestlé is currently awaiting the Minburi Civil Court’s decision, or a hearing, on the company’s request to lift the injunction, scheduled for June 20. The representatives stated that Nestlé would review its business plans in Thailand following the ruling, which may include the establishment of new production facilities.
A historic battle that shakes Thailand's coffee industry
The conflict involves Nestlé, owner of the Nescafé brand, and the Mahagitsiri family, long-time business partners and co-founders of QCP, a joint venture established in 1990 to produce Nescafé in Thailand.
In 2021, Nestlé announced the termination of its licensing agreement with QCP, with the contract officially ending on December 31, 2024. This deadlock led Chalermchai Mahagitsiri, a shareholder in QCP, to file for a temporary injunction at the Minburi Civil Court.
On April 3, 2025, the court granted the injunction, prohibiting Nestlé from producing, outsourcing, selling, or importing instant coffee products under the Nescafé trademark within Thailand.
However, the Central Intellectual Property and International Trade Court ruled in favour of Nestlé on April 12, allowing the company to resume its operations and product distribution under the Nescafé brand nationwide.
Nestlé has submitted a petition requesting the President of the Specialised Appeals Court to determine whether the Minburi Civil Court has jurisdiction to proceed with a high-profile case concerning a temporary injunction on the production and sale of Nescafé products in Thailand.
The Minburi Civil Court has scheduled June 20 to deliver its ruling or hold a hearing on Nestlé’s request to lift the injunction, which had been granted to the Mahagitsiri family.
