Nestlé escalates Thai Nescafé dispute after Mahagitsiri partnership ends

A production partnership becomes a legal battle

Nestlé’s dispute with Thailand’s Mahagitsiri family has moved deeper into litigation following the end of their longstanding Nescafé manufacturing partnership. The conflict centres on Quality Coffee Products Ltd, or QCP, a company established in 1990 to produce Nescafé products in Thailand. Nestlé and the Mahagitsiri family each held 50% of the venture.

The partnership combined Nestlé’s ownership of the Nescafé trademarks, coffee formulas and production technology with the Mahagitsiri family’s participation in the local manufacturing company. According to The Nation, Nestlé managed production, distribution and marketing. The relationship lasted for more than three decades before disagreement over QCP’s future led to the termination of the underlying agreement.

Contract termination and competing claims

Nestlé says it gave the Mahagitsiri family two years’ advance notice and that the joint-venture agreement expired on December 31, 2024. Its position is that QCP consequently lost the right to manufacture Nescafé products. The Mahagitsiri side disputes the legality of the termination under Thai law and has argued that QCP paid Nestlé tens of billions of baht over the years for access to the technology and rights required for production.

An international arbitral tribunal issued an award on December 20, 2024, supporting Nestlé’s termination of the agreement. The dispute subsequently reached Singapore’s courts. The Nation reported that the Singapore High Court dismissed applications challenging the arbitral findings and upheld the award. Nestlé treats those decisions as confirmation that the contractual dispute has been resolved in its favour, but civil proceedings brought by the Mahagitsiri side remain active in Thailand.

Supply chain and asset separation

The confrontation has also affected the operating structure behind one of Thailand’s largest coffee businesses. In April 2025, a Thai court order temporarily disrupted the production, contract manufacturing, import and sale of Nescafé products. A separate ruling by Thailand’s Central Intellectual Property and International Trade Court confirmed Nestlé’s rights to the Nescafé trademarks, although QCP disputed Nestlé’s interpretation of what that decision allowed the company to do.

Nestlé also filed proceedings with the Bangkok South Civil Court seeking to halt QCP’s operations and separate the venture’s assets. During the disruption, the company said it was importing coffee and using local contract manufacturers to maintain supply. The litigation therefore extends beyond ownership of a brand: it will determine the treatment of production assets, manufacturing rights and capacity built during the partnership. For processors, retailers and suppliers, the immediate issue is whether Nestlé can preserve stable availability while replacing a production arrangement developed over decades. The international decisions strengthen Nestlé’s contractual position, but the continuing Thai cases mean the final allocation of assets and liabilities remains contested.