BANGKOK — A legal dispute between global food giant Nestlé and Quality Coffee Products Co., Ltd (QCP), led by the prominent Thai Mahagitsiri family, threatens to shake the 17 billion baht ($502 million) Nescafé coffee empire in Thailand.
The Minburi Civil Court issued an injunction against Nestlé, the sole owner of the Nescafé brand, prohibiting the company from manufacturing, outsourcing, distributing or importing instant coffee products under the Nescafé brand in Thailand since April 3, 2025.
Mahagitsiri Family’s Role in the Dispute
The injunction followed a lawsuit filed by Chalermchai Mahagitsiri, a major shareholder of QCP, after Nestlé decided to terminate the Nescafé production rights contract with QCP in 2021. This termination was later confirmed by an international arbitration tribunal and is legally effective from December 31, 2024.
From 1990 to 2024, Nescafé products were manufactured in Thailand by QCP, a 50/50 joint venture between Nestlé and the Mahagitsiri family, of which Prayudh Mahagitsiri was a shareholder.
Under the joint venture, Nestlé retained full control over the management, production, distribution and marketing of Nescafé products. The production technology for Nescafé remains the intellectual property of Nestlé.
Nestlé’s Response to the Injunction
In a statement on April 9, Nestlé announced that it would take all necessary steps to resolve the matter. This includes filing an application to lift the injunction and submitting comprehensive documents to the Minburi Civil Court for review.
Nestlé emphasized its commitment to doing business sustainably in Thailand, where it has been selling its products for over 130 years and has invested more than 22.8 billion baht between 2018 and 2024.
“Nestlé continues to invest in Thailand for the benefit of consumers, employees, partner farmers, business and trading partners,” the statement said.
The company reaffirmed its authority over the management, production, distribution and marketing of Nescafé products and asserted that the technology used remains its intellectual property.
Government Monitoring Coffee Market
Wittayakorn Maneenet, director-general of the Domestic Trade Department, said on April 10 that officials are closely monitoring the retail coffee market, even though coffee is not on the Commerce Ministry’s price control list.
As a preventive measure for the benefit of consumers, the ministry has dispatched officials to check coffee supplies and prices at supermarkets, convenience stores and retail outlets. So far, they have found that the supply remains adequate and prices have not increased.
The authorities had held a meeting on April 8 with retailers, wholesalers and local shopping centers to assess stock levels, sales volumes and retail prices. Retailers and wholesalers confirmed that deliveries are continuing as normal, that there has been no drop in sales and that stock levels remain sufficient to meet demand. Retailers also reported no price increases.
Impact on Local Businesses
Suneevan Pochan, a coffee shop owner in downtown Khon Kaen located next to TOT Public Company Limited on Klang Muang Road, said that after hearing the news, she felt disheartened because her shop has been using Nescafé instant coffee to brew and sell to customers for more than 26 years. Customers have become accustomed to the smooth taste and aroma of this coffee brand.
“If Nescafé has to permanently stop production and sales, it will significantly impact our shop. We would not switch to brewing other coffee brands because they wouldn’t taste good to our customers. Instead, we would focus on selling traditional Thai coffee,” she said.
Suneevan expressed concern that during Nescafé’s production halt, wholesalers who still have this coffee brand in stock might take advantage of the situation by raising prices. If this happens, vendors who use this brand as their main ingredient will certainly be affected. She requests that the government help monitor the situation.
Market Outlook and Price Predictions
Around the same time, the Kasikorn Research Center published an analysis of the market for popular beverages, including coffee, cocoa and matcha, and predicted possible price increases in 2025 due to the persistently high cost of raw materials.
Prices for key ingredients such as cocoa and coffee remain high, while the cost of matcha continues to rise. As Thailand imports most of these ingredients, the overall price pressure is exacerbated by the high cost of milk, sugar/syrup, whipping cream, labor, retail space and equipment depreciation.
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