TCP Group to invest US$150 million in China

Thailand’s TCP Group is preparing to invest US$150 million to re-establish the Red Bull energy drink brand in China, the country where it faced a protracted legal battle with a former partner.
In mid-1990s, TCP Group formed a joint-venture in China with the Reignwood Group, controlled by Chinese-Thai businessman Chanchai Ruayrungruang, also known as Yan Bin. The partnership, Red Bull Vitamin Drink Co Ltd, expired in September 2018. The Red Bull brand, products and distribution rights have been the subjects of litigation since the partnership broke up, with Reignwood retaining control of the China business. However, TCP Group still owns the Red Bull brand and trademarks in China and worldwide.
TCP said in a statement that its new investments in China will support local partnerships, establish a new representative office, in-country team and manufacturing centres, as well as support the launch of new Red Bull products and other products from the company’s global portfolio.
“At its heart, this ambitious strategy is focused on continuing to provide high-quality and legitimate Red Bull products to the vast number of Chinese consumers,” it said in a veiled reference to the dispute with the former partner. TCP’s sales in China last year, the first full period since the end of the joint venture, were about US$150 million. In contrast, Reignwood’s revenue from Red Bull in the country was Rmb 22.3 billion (US$3.1 billion) in 2019.
TCP revealed that the US$150 million investment in China will be spread over 3 years with its new strategic partners, Guangzhou Yao Energy Co Ltd and Pusheng Food Sales Co Ltd. It has also created the TCP China Intellectual Property Protection Fund to further solidify the presence of its brands in the country.
Red Bull GmbH had worldwide revenue of about US$6.6 billion in 2019. It sold 7.5 billion units of drinks propelled by growth in emerging markets like Brazil, India and Africa.