Wanglaoji tea
© Wikicommons

Two rival makers of China’s most popular canned soft drink have taken their “tea wars” to the courts, with one tea maker seeking what local media said would be the largest damages in a Chinese intellectual property case.

State-owned Guangzhou Pharmaceutical Holdings is seeking Rmb$2.9bn ($436m) in damages from Hong Kong-based Jiaduobao Group for infringements on its trademark “Wanglaoji” herbal tea drink, according to state-run Xinhua News.

The battle, being heard in Guangzhou provincial court, follows a history of disputes in the country’s food and beverage industry between foreign brands and domestic partners.

In 2009, Danonepulled out of a high-profile partnership with Hangzhou Wahaha Group after the French yoghurt maker accused it of running parallel businesses. The legal battle, fought in several jurisdictions, took two years and eventually resulted in Danone selling off its share in the joint venture for what analysts said was below market value.

The fight between the tea makers has resulted in an odd arms race — and at times a hot war — where both continued to manufacture and sell the same product under the same name for several years while trying to win market share in the world’s largest food and beverage market.

Guangzhou Pharma originally leased the brand to Jiaduobao more than a decade ago, but a court ruling from 2012 said that Jiaduobao had no right to continue marketing the sweet, chrysanthemum-flavoured drink under the name Wanglaoji as of mid-2010.

During the dispute, Jiaduobao continued selling Wanglaoji-branded tea in its original red can, proving more popular than the likes of Coca-Cola in sales and eventually becoming the market leader for canned drinks in China, Chinese media reported in 2013.

Guangzhou Pharma began its own marketing operations, selling the product in a green drink box but claimed far lower sales.

The battle for market share erupted into violence at times between the two companies. One report in Beijing Review magazine in 2012 said that a village salesman for Guangdong Pharma was slashed across the face with a knife by his counterpart at Jiaduobao as the two attempted to market the drink.

Jiaduobao now produces an eponymous tea and no longer uses the Wanglaoji name. However, the two groups have continued to vie for market share. The Rmb2.9bn damages claim pertained to alleged losses to Guangzhou pharma business between 2010 and 2012.

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