A temporary court injunction has halted the sale of Nescafé products in Thailand, and Tang Ngee Soon Super Store Co., a prominent wholesale and retail chain in Udon Thani, warns of potential shortages if the ban continues.
Nestlé is requesting that retailers provide letters detailing the operational impacts of the injunction.
Nestlé Thailand released a statement explaining that Nescafé is locally produced through a partnership with Quality Coffee Products Ltd (QCP), which is co-owned by Nestlé and the Mahagitsiri family.
The partnership agreement concluded on December 31, 2024, and since then, the shareholders have not reached a consensus on QCP’s future direction.
A legal injunction currently bars Nestlé from producing, outsourcing, distributing, or importing instant coffee products under the Nescafé brand in Thailand.
Milin Veraratanaroj, chairman of Tang Ngee Soon Super Store Co., mentioned that last year Nestlé informed the store about ending its contract with the Mahagitsiri family.
He emphasized that Nestlé needs to continue serving the Thai coffee market and may need to import products from countries like Vietnam and Indonesia to satisfy local demand during this disruption.
“I was contacted on April 9 and asked if our store could write a letter to Nestlé, describing the impact we face from not being able to sell Nescafé products,” he commented, noting that the letter might help challenge the court’s injunction.
Typically, Nescafé products are distributed monthly to stores across the country, he noted.
While some wholesalers have secured their April stock, ongoing injunctions could prevent further deliveries, prompting some retailers to look for alternative sources.
According to him, some retailers might even start stockpiling the products.
The extent of the Nescafé shortage in Thailand will hinge on how long the injunction lasts.
He hopes the injunction will be lifted soon, allowing Nestlé to resume standard distribution and minimize supply disruptions.
However, if the court upholds the injunction, it could lead to a sustained shortage, given Nescafé’s substantial market presence in Thailand.
In a scenario where the injunction extends for several months, competing brands could try to capitalize on the situation.
Yet, these brands may struggle to fully meet the demand, as increasing production capacity takes time.
Should the injunction persist for four months, it could disrupt the entire Thai coffee industry, with competing brands unable to adequately meet consumer demand.
