The sixteen year old joint venture between Nestle S.A. and The Coca-Cola Co will cease to exist from January 1, 2018 according to an agreement signed between both these companies ending their Ready-to-Drink tea joint venture.
The joint venture that initiated in 1991 with the name Coca-Cola-Nestle Refreshments Co. S.A., was renamed as Beverage Partners Worldwide (B.P.W.) in 2001. The 16 year old business relation will no longer remain starting next year. Nestle permits license to Coca-Cola for the distribution and production of Nestea in seven countries namely Andorra, Romania, Canada, Spain, Portugal, Hungary and Bulgaria. Nestle takes away the right from Coca-cola to conduct any activity from 2018 in the rest of the countries which are currently a part of the partnership.
In United States and few other countries, where Nestle operates the Nestea brand through its Nestle Waters Division, will now as per the new agreement add European countries which weren’t a part of earlier licensed nations in its production and distribution.
Justifying the decision, Nestle says that the ready-to-drink tea market is rapidly growing and company thinks it as the right time to dissolve the partnership and develop Nestea independently.
The collaboration in 2001 was made with an objective to turn out the rise in R-T-D beverage market in their favor with a joint effort to capture maximum market size. But just last month, Nestle revealed its plan to restructure the Nestea brand with bringing out some redevelopment in tea product to come out as a giant in the $4.5 billion R-T-D tea sector.