MILAN – Nestlé and Lotte Group announced the announced the winding down of their 50/50 joint venture set up more than a decade ago in South Korea. Lotte Group is a subsidiary of Lotte Wellfood. The JV will end in the first quarter of next year, according to a statement released by the South Korean division of the Swiss multinational.
Established in 2014, Lotte-Nestlé Korea produces, distributes, and sells Nestle’s Nescafe instant coffee and coffee mix, chocolate powder drinks, fruit powder drinks, and pet food in South Korea.
Thomas Caso, the CEO of Nestlé’s operations in South Korea, said: “Nestlé and Lotte have collectively made this decision after comprehensively considering various factors.
These factors include: our overall global priorities, as well as the domestic market conditions and our shared abilities to win. Both companies will strive to ensure stable operations and change management until the end of joint venture operations.”
According to a Lotte Group representative quoted in South Korean media, the decision to terminate the JV had been planned for several years and was due to a “wrong business strategy”.
The Swiss giant has not officially announced any plans for its South Korean operations and has not clarified whether its decision will affect employment levels.
Nestlé Korea is reportedly planning to acquire Nestlé Purina PetCare from Lotte-Nestle Korea next month. It is not yet clear whether the new pet-food unit will also handle the coffee and culinary brands locally.
