Just over a week ago, news broke that the distribution agreement between multinational food companies Coca-Cola and Nestlé, an agreement governing the introduction of the Nestea tea beverage in Spain, had ended. The situation seems to have blurred since then, and what could have been an amicable ending may end in conflict.

New statement. The controversy arose in response to Coca Cola’s statement that it was the sole and exclusive owner of the tea soft drink “formula” currently marketed under the Nestea brand. American and Swiss multinational company Nestlé. This may limit the latter’s ability to keep the original brand alive.

From Nestea to Fuze Tea. A little context. Last week, it was announced that Nestea’s distribution agreement in Spain would not be extended by the parties, so American Coca-Cola would stop distributing tea soft drinks in Spain after the agreement expires on December 31. Coca-Cola and Nestea followed different paths.

The strategy of the American multinational soft drinks company was to import an established international brand to the Spanish market: Fuze Tea. Coca-Cola Iberia had already started to promote the beverage, which is its “global brand” operating in nearly a hundred countries, under its name in other markets.

It did not take long for the Swiss Nestlé to clarify its point of view and its intention to ensure that the Nestea brand does not disappear from supermarkets and accommodation services. “Consumers will still be able to find Nestea in their usual stores from January 1 (…),” the company said.

New agreements. Everything seemed to indicate that the European multinational would be looking for a new distribution agreement. According to some media reports, Nestlé already has a distributor candidate: Catalan beer producer Damm.

Two brands, one product? This meant that where once there was only one product, we would now have two products: the same formulas, but produced and distributed under different brands and by different groups, namely Fuze Tea from Coca-Cola and Nestea from Nestlé and Damm.

This doesn’t seem to be a viable solution for Coca-Cola, which this week issued a statement claiming that its new Fuze Tea drink “uses the original formula of the traditional tea beverage and will remain the exclusive property of The Coca-Cola.” The Coca-Cola Company as of January 1, 2025.”

For Nestlé, this will mean the need to change Nestea’s “formula”. This being the case, the picture becomes complicated: The product we know as Nestea would disappear from the market as Fuze Tea, but the Nestea brand can continue with us… by changing the product.

January 1. It is not yet known what Nestlé’s reaction will be to the American company’s ordeal. There are a little more than two months left for the agreement between the two companies to be finalized, and the American company has made the final move.

Perhaps we still have to wait to know whether Nestlé still has a trump card, or whether it will persist in its efforts to keep the Nestea brand alive, even if it means abandoning the original formulation.

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Image | Roger Ferrer Ibáñez / The Coca-Cola Company