Thailand’s Chang Beverages may sue Danish partner Carlsberg

Chang Beverages Pte. Ltd., a Singapore-based subsidiary of Beer Thai (1991) Co., on June 23 threatened to sue Danish firm Carlsberg Breweries A/S for dropping Chang Beverages’ representatives from Carlsberg Asia Pte Ltd., a joint venture of both companies.      Chang Beverages currently holds 50% in the joint venture, with the remainder held by Carlsberg Breweries.      The Danish brewer announced earlier the same day that it was replacing directors appointed by Chang Beverages to Carlsberg Asia, citing contractual failures.      Carlsberg said the venture – a Thai sales and distribution company – had not “developed according to expectations,” with the activities that Chang Beverages was supposed to contribute being “smaller and different businesses” than originally assumed.      “In order to protect its interests, Carlsberg Breweries has replaced Chang Beverages’ board members in Carlsberg Asia with Carlsberg Breweries’ (nominees).”      In response, Chang Beverages said the announcement contained factual inaccuracies and that the joint venture contract called for an injection of assets of equal value which was agreed to by both parties at the time of the contract.      Suvarn Valaisathien, an adviser to Chang Beverages, said that Carlsberg Breweries’ act of replacing Chang Beverages’ board nominees was clearly a breach of contract. Carlsberg Breweries has not complied with its obligations under the joint venture contract whilst Chang Beverages remains ready, willing and able to comply with its obligations.      “Considering the actions of Carlsberg Breweries in creating this dispute, an arbitration or lawsuit by Chang Beverages is likely to be instituted.”      The Thai side demanded that Carlsberg Breweries promptly appoint directors nominated by its side to Carlsberg Asia’s board according to the contract, he said.      Margrethe Skov, public affairs director for Carlsberg Breweries in Denmark, declined to comment on the dispute, saying that the “matter was under negotiation”.      Meanwhile, an industry source told Bangkok Post newspaper that the dispute between Carlsberg and Chang Beverages was not surprising to him as the Thai partner had taken advantage of its Danish partner since the venture was formed.      The source, who asked not to be named, said that the Thai company learned the technology from Carlsberg to launch Chang beer, now Thailand’s best-selling brand, in Thailand several years ago.      Chang beer made its debut a decade ago, shortly after Thai liquor tycoon Charoen Sirivadhanabhakdi opened the Beer Thai brewery to produce Carlsberg beer in a joint venture with the Danish company.      The source also said that Chang Beverages had used the Carlsberg’s international network through Carlsberg Asia, to distribute Chang beer abroad but has not helped promote Carlsberg in Thailand.      “I’m not surprised (about the dispute) at all,” he said.      “What surprises me is the tolerance Carlsberg has shown for a long time. While in most markets, Carlsberg is able to compete head-on with Heineken, Thailand is one of the few markets where Carlsberg’s sales are minimal,” the source added.      Carlsberg, the world’s fifth-largest brewer, has said Asia was a key element in its development strategy.      Carlsberg Breweries is 60% owned by the Danish group Carlsberg and 40% by the Norwegian conglomerate Orkla.      Carlsberg Asia brews and distributes Carlsberg as well as Chang beer. Read also: “Carlsberg Breweries ends joint venture with Chang Beverages” and “Carlsberg production in Thailand continues” 

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