Nestle, Coca-Cola to dissolve tea joint venture from 2018

Global food giant Nestle and soft drink maker The Coca-Cola Company have agreed to dissolve their tea joint venture Beverage Partners Worldwide (BPW) as of the start of 2018, Nestle announced on Friday.

Created in 2001, BPW offers ready-to drink tea, in particular Nestea, in Canada and Europe. "The ready-to-drink tea market has evolved, and Nestle believes the time is right to develop Nestea independently," it said in a statement.

Nestle is granting Coca-Cola a licence to manufacture and distribute Nestea in Canada, Spain, Portugal, Andorra, Romania, Hungary and Bulgaria.

The Nestle Waters division, which manages the Nestea brand in several countries, including the United States, will manage Nestea in all European countries not concerned by the licensing agreements, it added.

Under the partnership, Nestea products were manufactured by Coca-Cola and distributed by Nestlé's beverage department in the US and BPW.

Nestea products - including refrigeratable teas, ready-to-drink bottles and liquid and powered tea concentrates - compete with Unilever (UL) and PepsiCo Inc.'s (PEP) Lipton Iced Tea and Brisk brands managed by the Pepsi Lipton Tea Partnership, which formed in 1991.

Nestle and Coca-Cola had, in 2012, announced plans to phase out the joint venture in the US, as Nestlé retained rights to the Nestea brand name and Coca-Cola continued production of the same beverage under the new name Fuze.