Link to teaching case: 


In early 1996, Mr. Mascenon, vice president of the instant drinks department of Nestle (Philippines), had to decide how to respond to a major change in Nestle's environment. Until January 1996, imports of coffee in any form--green beans, roasted, or ground and processed--were prohibited. As of January 1996, however, coffee within a specified quota could be imported over a 30% tariff. Nestle was the only foreign-owned producer of coffee in the Philippines and had over 60% of the market, up from 52% seven years before. Over the same period, total coffee consumption in the Philippines doubled. Nestle produced its coffee from Philippine-grown robusta beans, since Philippine arabica beans were of inferior quality. Outside the Philippines, however, a mixture of robusta and arabica beans was usually used. There were rumors that both Procter & Gamble (Folgers) and Kraft General Foods (Maxwell House) were planning to enter the Philippine market, initially via imports, but possibly in the future with production facilities. 


Donald J. Lecraw


Ivey Publishing

Pub date: 

Tuesday, October 14, 1997


Wednesday, December 1, 1999