---
title: "Explosive: Former Employee Reveals JDB's Major Turmoil - Executives Leaving and Factory Production Halted"
description: "JDB is facing a crisis as former employees reveal that production lines in Fujian, Zhejiang, Beijing, and other locations have been halted, with nearly half of its senior managers leaving. The company is also dealing with declining sales, heavy debts, and internal conflicts."
author: "袁芳"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
telephone: "+8615854817671"
published: "2016-09-14"
language: "en"
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# Explosive: Former Employee Reveals JDB's Major Turmoil - Executives Leaving and Factory Production Halted

> JDB is facing a crisis as former employees reveal that production lines in Fujian, Zhejiang, Beijing, and other locations have been halted, with nearly half of its senior managers leaving. The company is also dealing with declining sales, heavy debts, and internal conflicts.

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**Latest News**

September 13 news: JDB has been severely weakened by consecutive legal defeats against Wanglaoji. Recently, a former JDB employee revealed that production lines at the group's factories in Fujian, Zhejiang, Beijing, and other locations have been halted one after another. Additionally, nearly half of the group's only ten or so senior managers have left, with former Executive President Yang Aixing resigning at the end of 2015, and Party Secretary Pang Zhenguo rumored to be leaving soon. JDB is facing a predicament of factory shutdowns, declining sales, and high-level turmoil.

An employee who worked at JDB for five years told reporters that the output at JDB's Fujian factory has dropped by half, with severe inventory buildup. Previously, each factory had two production lines, each with an annual output of about 700,000 cans. However, since the end of last year, factories have been successively shut down, and half of the frontline production workers have left. The impact has also spread to JDB's contract manufacturing plants across the country.

In response to this incident, Beijing Time reporters contacted JDB Group's public relations department, but the head of the department said they were unaware of the situation.

**◆ ◆ ◆**

**Accused of Disguised Layoffs and Management Turmoil**

Affected by factory shutdowns, JDB has begun implementing "overt and covert" layoff plans. After communicating with multiple production line employees, reporters learned that JDB has recently tightened performance assessments for employees.

In a disciplinary notice exposed by a JDB technician, reporters found that in May of this year, this employee was deemed to be slacking off because he completed work late due to hospitalization, resulting in a 20-point demerit. The technician said this means his monthly performance bonus and the several thousand yuan year-end bonus would be forfeited.

"It was the first time I was demerited for no reason, and appealing to superiors was useless. Many colleagues have had similar experiences, but they silently endure because jobs are hard to find and we don't want to leave," the technician complained. It is reported that some employees have publicly stated that JDB's unjustified demerits, deduction of performance bonuses, and year-end bonuses are disguised layoffs aimed at forcing employees to leave.

[Image: Disciplinary notice exposed by JDB technician]

From external information, it is known that at the end of last year, the layoff ratio across JDB Group departments was as high as 40%, and in the first half of this year, about 1,200 frontline employees were laid off. An employee at JDB's Hangzhou concentrate plant revealed that management even urged employees to resign daily.

The pressure has also caused frequent turmoil among JDB's senior management. According to Beijing Time reporters, shortly after former Executive President Yang Aixing left, Vice President in charge of quality control Wang Yuegui was transferred to handle international business. Additionally, Party Secretary Pang Zhenguo was widely rumored to be leaving. An insider revealed that many positions within JDB Group are occupied by relatives, and internal strife for high-level positions has never ceased.

**◆ ◆ ◆**

**Declining Sales in Offline Channels, Supermarkets Significantly Reduce Purchases**

In 2014, due to losing the red-can dispute with Wanglaoji, JDB was ordered to pay 150 million yuan in compensation to Guangzhou Pharmaceutical Group. As a result, JDB began replacing its red cans with gold cans in 2015, but the direct consequence was low market acceptance.

Beijing Time reporters learned from offline supermarkets such as Beijing Wumart and Beijing Chaoshifa that in the first half of this year alone, Wumart's purchases from JDB Group plummeted to less than 10 million yuan, with overall sales declining by 20%. According to the purchasing manager at Wumart, Wanglaoji's rising market share has partly eroded JDB's share. Currently, Wanglaoji holds about 60% of the market, reflected in purchasing data showing that purchases from Wanglaoji exceeded 11 million yuan in the first half of the year.

Previously, JDB and Wanglaoji had been arguing over which was the top-selling herbal tea. In March of this year, the China Food Industry Association publicly stated in its "2015 Annual Beverage Industry Operation Report" that JDB-branded herbal tea ranked first with a 52.1% sales market share.

Interestingly, in April 2015, JDB, which had been touting its "nationally leading sales of red-can herbal tea," was exposed by CCTV for using a "three-no" organization to create "excellent" sales data rankings. Whether JDB's sales figures are genuine remains questionable.

**◆ ◆ ◆**

**Unpaid Compensation and Long-Term Debts to COFCO**

As multiple lawsuits between JDB and Wanglaoji have entered final judgment, JDB has been ordered to pay over 4.5 billion yuan in total compensation, including 2.9 billion yuan for trademark infringement, 150 million yuan in the first-instance judgment for the red-can packaging case, 1.5 billion yuan in additional claims by Wanglaoji against five other JDB companies in the red-can packaging case, as well as cases involving the name change and advertising slogans like "Seven Consecutive Championships" and "7 out of 10 Cans." JDB is now heavily in debt.

At the same time, due to inventory backlog and declining sales, JDB is struggling to repay debts to upstream suppliers. A relevant person in charge reported that JDB has owed COFCO Packaging Holdings more than several hundred million yuan in supply payments.

From COFCO Packaging Holdings' 2016 interim report, reporters learned that in the first half of this year, the group's accounts receivable reached 1.627 billion yuan, an increase of 19% compared to 1.364 billion yuan in the first half of 2015.

[Image: COFCO Packaging Holdings' 2015 accounts receivable data]

According to an investor, about 45% of COFCO Packaging's two-piece cans are supplied to JDB, which means JDB can absorb about 600 million cans. Based on JDB's annual sales of 20 billion yuan, JDB's debt of around 100 million yuan accounts for about 0.05% of the group's revenue.

In response, Du Bin, head of investor relations at COFCO Packaging, explained that it is normal for suppliers and partners to have outstanding payments, and the credit period for cooperation can last from 3 to 10 months.

Nevertheless, reporters learned from public information that JDB has reduced its advertising and marketing spending in recent years, including withdrawing from the title sponsorship of "The Voice of China." It is reported that before 2014, JDB's annual advertising spending was at least 1 billion yuan. Earlier this year, JDB chose to cooperate with a popular online drama, where the investment for one drama was only a few million yuan, indicating a significant reduction in advertising expenses.

**Reporter: Beijing Time Finance Reporter Yuan Fang**

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