Thailand Faces Coffee Shock as Court Halts Nescafé Production Nationwide

Thailand is bracing for a potential coffee crisis after a court injunction forced Nestlé to suspend the production, sale, and import of its flagship Nescafé products across the country. The Minburi Civil Court issued the ruling on April 3, 2025, halting all business activities related to Nescafé amid a legal dispute with a former local manufacturing partner.

The order follows a lawsuit filed by Chalermchai Mahagitsiri, a shareholder in Quality Coffee Products (QCP), the company that previously produced Nescafé in Thailand. The decision has triggered widespread concern among retailers—from major supermarket chains to small street vendors—who now fear an imminent shortage of one of the country’s most popular coffee brands.

Milin Veerarattanaroj, chairman and managing director of Tang Ngee Soon Superstore in Udon Thani, warned that even a brief disruption in supply could have serious financial consequences. “Just three days without the product causes massive losses,” he said, noting that the store generates between 300 to 400 million baht annually from Nescafé sales.

The sudden halt has already prompted panic buying, with retailers in neighboring provinces rushing to secure remaining stock. “It will be like the scenes we see during floods, where people scramble to buy whatever they can,” Milin added.

Despite the growing concern, the Ministry of Commerce has attempted to calm fears, stating that a nationwide shortage is not yet expected.

At the heart of the issue is Nestlé’s termination of its agreement with QCP, which had produced Nescafé locally since 1990. The agreement ended on December 31, 2024, with Nestlé asserting that the move was legally supported by a ruling from the International Court of Arbitration.

Founded in 1989, QCP was a 50/50 joint venture between Nestlé and the powerful Mahagitsiri family. Nestlé controlled the brand’s production, marketing, and distribution, while also owning the technology used in manufacturing.

After the partnership ended, the two sides failed to reach an agreement on the company’s future, prompting Nestlé to file a petition in March 2025 seeking QCP’s dissolution. In response, Chalermchai filed two lawsuits against Nestlé’s subsidiaries and executives, leading to the court’s temporary injunction.

Nestlé has since voiced concerns over not being given the chance to defend its case before the court order was issued. Nonetheless, the company is complying with the ruling while filing a formal objection and presenting supporting evidence to the Minburi Civil Court.

In a statement released on April 4, Nestlé announced it would no longer accept new orders for Nescafé products until further notice. Retailers with existing stock are permitted to continue selling.

The company has also warned of the far-reaching consequences of the ban, including:

• Major income loss for small retailers and independent coffee sellers

• Disruption to the livelihoods of Thai Robusta farmers, as Nescafé purchases over half of Thailand’s Robusta crop annually

• Economic strain on Nestlé’s local employees, suppliers, and partners

According to Thailand’s Department of Business Development, QCP generated more than 17.1 billion baht in revenue in 2023, with net profits surpassing 3.4 billion baht—despite an 8.14% decline from the previous year.

Nestlé emphasized its 130-year legacy in Thailand and reaffirmed its commitment to investing in the country, having poured over 22.8 billion baht into the local economy between 2018 and 2024. The company says it remains dedicated to resolving the dispute and resuming normal operations as soon as possible.