Click to read the original article for details. The crisis for Hua Bin FMCG fully erupted at the end of 2016, but some 'truths' can only be seen clearly when the fog gradually lifts. This September, Red Bull Company (the joint venture not under Hua Bin) will reach its 'business term expiration' node. Whether it's the last gasp or a counterattack depends on Yan Bin. Business Term Expiration: Another Node The dispute over 'Red Bull' has never lacked 'gossip.' Although there has 'never been an official statement' from Hua Bin FMCG Group (hereinafter referred to as Hua Bin FMCG) regarding when the 'trademark' will be returned, 'After the group meeting, there might be news.' A source said 10 days ago. Unfortunately, he couldn't bring the latest news afterward. Later, it was learned that the high probability was that Hua Bin FMCG still didn't plan to 'face reality,' so what should have come didn't. But real-world experience tells us that what should come will eventually come. This September, Hua Bin FMCG faces another node. Business registration information shows that Red Bull Vitamin Beverage Co., Ltd., established on September 30, 1998 (the joint venture, hereinafter referred to as Red Bull Company) will face its 'deadline' on September 29 — the company's business term expires. It was because of this company that the familiar functional drink Red Bull was brought to China. However, earlier, the shareholders of this company included not only legal representative Yan Bin but also Yan Bin's former partner, TCP Group member Thai Tiansi Pharmaceutical Health Care Co., Ltd. (Tiansi Pharmaceutical), which has nothing to do with today's Hua Bin FMCG or Hua Bin Group. Tiansi Pharmaceutical officially stated that in 1995, the Xu family, together with other shareholders including Mr. Yan Bin, jointly established Red Bull Company. Out of trust in Mr. Yan Bin at that time, the Xu family appointed him as chairman of the joint venture and entrusted him with managing Red Bull's business operations in the Chinese market. However, over a period of twenty years, Yan Bin maneuvered repeatedly, turning Red Bull into a 'private tool' for Yan Bin and Hua Bin FMCG. For a considerable time, the public only knew of Red Bull and Hua Bin Group, but few knew of Tiansi Pharmaceutical. In outsiders' eyes, 2016 was a turning point for Hua Bin FMCG. In October of that year, the Red Bull trademark license agreement between Tiansi Pharmaceutical and Red Bull Company expired and was not renewed. In other words, even the post-maneuver Hua Bin FMCG no longer had the right to use the Red Bull trademark. Now, after Red Bull Company's business term expires, it is worth examining on what grounds Hua Bin FMCG can continue to produce and sell Red Bull. Of course, there are ways. Over the past two years, Tiansi Pharmaceutical has taken Red Bull Company and Yan Bin to court as defendants. To respond, Yan Bin acted quickly, and soon Tiansi Pharmaceutical also found itself in the defendant's seat. For example, in September two years ago, the majority shareholders of Red Bull Company passed an intended legal and valid resolution to remove three directors from the board, including removing Yan Bin as chairman. But to this day, the legal representative of Red Bull Company is still Yan Bin. 'Yan Bin has been delaying the handling of the business registration changes. ' Tiansi Pharmaceutical stated. Delay is Hua Bin FMCG's current main strategy, and the means are the necessary legal procedures. During the days of mutual lawsuits, Hua Bin FMCG either lost cases or temporarily withdrew lawsuits, but the goal of delay was ultimately achieved. The most recent delay occurred in mid-August, when Yan Bin, as the plaintiff, voluntarily withdrew the lawsuit two days before the court hearing. Taste Fading: Red Bull Is No Longer 'Red' Without the skin, what can the hair adhere to? In fact, Hua Bin FMCG's crisis is not only about the trademark but also about taste. 'Media have reported that consumers reflect that the taste of the gold-can Red Bull, which is prevalent in the Chinese market, has become lighter. Didn't you know?' a source said. 'This matter is known to everyone in the circle, but no one has pointed it out, and Hua Bin FMCG naturally wouldn't be foolish enough to make it public. ' he added. As for why, it naturally involves the formula and raw materials of the taste. The raw material issue also erupted at the end of 2016. Tiansi Pharmaceutical officially confirmed that at that time, besides the trademark license agreement expiring and not being renewed, thereafter, Tiansi Pharmaceutical no longer provided the flavoring needed for producing the beverage to Red Bull Company. Specifically, before the contract expired, Tiansi Pharmaceutical provided raw material supply to Red Bull Company (i.e., the joint venture), not to Hua Bin FMCG. As a result, Yan Bin's Hua Bin FMCG had to change raw material suppliers, which is why there is now a 'lighter' Red Bull. 'Nonsense.' This is the response Hua Bin FMCG gave when asked about the flavoring issue. Of course, what it also considers nonsense is the wave of resignations among Hua Bin FMCG's senior management. Not long ago, a person who had worked at Hua Bin FMCG for many years left, one of many resignations over the past two years. But besides personal choice, the reason for his departure, the background that cannot be ignored, was the departure of the local 'provincial general manager' and the ensuing 'big purge.' According to his recollection, in two years, nearly 50% of provincial-level executives resigned one after another. Although Hua Bin FMCG's management system was already quite mature, it still had some impact. 'For example, many of those who left went to the opposite side of Hua Bin FMCG and used the familiar market methods to hurt each other... whether at Carabao or the new Red Bull (Tiansi Pharmaceutical's Chinese company),' he said. The '50%' ratio was confirmed by the few Hua Bin FMCG employees, both departed and current, from different sales regions. Some sources even said that in some places, it was even more severe. Of course, 'it's also normal.' Fortunately, Yan Bin is not afraid. In fact, Hua Bin FMCG is not entirely unprepared for what is to come. As early as a few years ago, Hua Bin FMCG began looking for a way out. Over the years, Veta Coca, Guofei Shuang, and Voss Water were all retreats it sought for itself. However, years have passed, and none of these forces can come close to the profits Red Bull contributes to Hua Bin FMCG. Moreover, some products have even fallen into losses from which they cannot extricate themselves. And Red Bull, a product that might become a 'discarded pawn,' has not been placed first by Hua Bin FMCG since 2016, although it still contributes nearly 80% of Hua Bin FMCG's performance. Heavy Investment: Zhan Ma to Take Up the Challenge The best way to replace a cash cow is to find a substitute. So Hua Bin FMCG launched 'a new national brand, energy vitamin beverage—Zhan Ma.' 'When the boss came back from headquarters with this product, he was dumbfounded. He didn't know how to operate Zhan Ma. ' the aforementioned source said. To achieve replacement or buy speed with money, 'buy Zhan Ma, get Red Bull free' has become a strategy implemented to this day. In earlier years, some people used 'help get on the horse and escort for a while' to describe similar behavior. Unfortunately, Zhan Ma's combat effectiveness is not strong. With all employees' efforts and giving up active 'cultivation' of Red Bull, last year Zhan Ma only achieved sales of several billion yuan. To truly 'replace' Red Bull, 'it may take even longer.' From a 'phased work sharing' leaked from a branch company, it's not hard to see that this summer, Hua Bin FMCG employees have been 'fighting' with Zhan Ma on their backs, although their combat effectiveness is worrying. They used methods like 'grabbing funds, grabbing warehouses, competing for customer relationships, and explaining policies' to deal with competition from all sides in the market, even using the creative idea of 'everyone freezes.' Unfortunately, Zhan Ma's sales are far behind Red Bull. In the same regional market, most of the time, Zhan Ma's sales are just a fraction of Red Bull's. The company adopted the strategy of 'heavy rewards will bring brave men.' To motivate sales staff, for every box of Zhan Ma sold, sales personnel receive a commission of 3-5 yuan. Such things were rare in Hua Bin FMCG before. In the past, Hua Bin FMCG's distributors, sales personnel, and even salesmen voluntarily hoarded goods. Two years ago, 'some distributors even hoarded Red Bull worth 80 million yuan, or even 120 million yuan, on their own.' In contrast, is there any comparison with Zhan Ma? As a result, some have predicted that Hua Bin FMCG's operations are 'loss-making.' Of course, this is also considered 'nonsense' by Hua Bin FMCG's official side. 'Hua Bin's finances are very tight; losses are not visible,' a source said. In other words, the statements look good, but losses are also possible... Regarding trademark use, lawsuits, and future responses, Hua Bin FMCG, as usual, chose 'no comment for now.' We cannot know Hua Bin FMCG's future moves or tricks, but the general consensus is that 'Yan Bin will not easily let go. ' Facing Hua Bin FMCG's 'illegal production and sales,' the past 'substitution' and Yan Bin's wealth but never 'dividends' to the major shareholder of Red Bull Company, we can only sigh at life's ability to 'foreshadow.' Now, Tiansi Pharmaceutical is ready to play on its own. 'The team has been assembled, and even the first round of distributor negotiations and investment attraction has ended. However, there is no exact news on when the product will be launched,' a source said. I still remember when the news of the product launch first came out, it was spring. After waiting through a summer, Tiansi Pharmaceutical's 'new Red Bull' still hasn't arrived. In the past two years, more and more large enterprises have entered the functional drink market. In the future, waiting for the 'new Red Bull' will not be a one-step process, and good things take time. Background Supplement

  1. Red Bull beverage was originally developed by Mr. Chaleo Yoovidhya in 1975. With Red Bull's success in the international market, in 1993, Mr. Chaleo Yoovidhya established the first Red Bull factory in China in Hainan Province, naming it 'Red Bull' in Chinese, and introduced Red Bull beverage to China.
  2. In 1995, the Xu family, together with other shareholders including Mr. Yan Bin, jointly established Red Bull Vitamin Beverage Co., Ltd. (the joint venture). Out of trust in Mr. Yan Bin at that time, the Xu family appointed him as chairman of the joint venture and entrusted him with managing Red Bull's business operations in the Chinese market. The Xu family has been the controlling shareholder of the joint venture since its establishment and has continuously provided support for its operation and development, including financial support, process technology, product formulas, and trademark licenses.
  3. In October 2016, Tiansi Pharmaceutical's Red Bull trademark license agreement with the joint venture expired and was not renewed. In fact, for some time before that, the Xu family had been paying attention to Mr. Yan Bin's management of his personal business and his violations of legal obligations. These behaviors include Mr. Yan Bin establishing multiple companies wholly owned by him outside the joint venture system, which produced and sold Red Bull products without any trademark license or consent from other joint venture partners, appropriating Red Bull's business in China. In addition, under Mr. Yan Bin's actual control, the continuously profitable joint venture never distributed any profits to the Xu family, the major shareholder.
  4. As a member of the TCP Group, Thai Tiansi Pharmaceutical Health Care Co., Ltd. is a leading Thai food and beverage company wholly owned by the Xu family. Thai Tiansi Pharmaceutical Health Care Co., Ltd. and the Xu family are the founders and owners of the global Red Bull brand and the 'Red Bull' trademark. (The above information was provided by Tiansi Pharmaceutical.) Source: Kuai Xiao (ID: fbc180) On October 23-24, during the Autumn Sugar and Wine Fair, the '2018 FMCG City Distribution Logistics Conference' hosted by New Distribution will be held. At that time, we will invite industry experts, FMCG warehousing and distribution specialists, and distributors who have transformed to unified warehousing and distribution platforms to discuss and answer questions about the future development trends of FMCG city distribution logistics and practical cases of distributor transformation to unified warehousing and distribution, hoping to bring you different inspiration and thinking! -END-