The Switzerland-based food producer will settle the matter at court on June 9 against the father and son duo Prayudh and Chalermchai Mahagitsiri.
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A logo is pictured during the 152nd Annual General Meeting of Nestle in Lausanne, Switzerland April 11, 2019. Photo by Reuters |
Prayudh Mahagitsiri, a Thai coffee magnate, has a net worth of $1.8 billion, with a large chunk of it stemming from his 34-year partnership with Nestlé, according to Forbes.
The core conflict between Nestlé and the Mahagitsiri family centers around who has control over distribution of products bearing the Nescafé trademark.
Nestlé on March 14 requested a Bangkok court to liquidate Quality Coffee Product, a 50:50 joint venture it formed with the Mahagitsiri family over three decades ago.
Nestlé claimed that since it managed production, distribution, and marketing, the liquidation of the company means that all distribution in Thailand would fall under its hands, according to The Nation.
The Mahagitsiri family, however, argued that while Nestlé owns the coffee formula and production technology, Quality Coffee Product has paid Nestlé “tens of billions of baht” over the years for these rights.
As both parties were unable to reach an agreement, the Minburi Civil Court on April 3 issued an eight-day suspension of Nescafé product sales, which barred Nestlé from manufacturing, outsourcing production, distributing, or importing instant coffee products bearing the Nescafé trademark in Thailand.
The Swiss firm now claims that the suspension has put a dent on its revenue and demands BHT577 million in compensation.
By the end of the month, the Central Intellectual Property and International Trade Court issued a ruling confirming that Nestlé (Thai) Ltd holds the exclusive right to use the Nescafé trademark in Thailand.
Although a meditation between the two parties took place on May 28, no agreement was reached.
