Wanglaoji Wars

China’s cola wars are escalating, except the cola in this case is herbal tea

April 21, 2013
April 21, 2013
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Two versions of Wanglaoji herbal tea sold by Guangzhou Pharmaceutical Group (left) and Jiaduobao Drink & Food Co.(Wikimedia Commons)

This Monday (April 22), a court hearing is due to be held in a case that has become China’s version of Pepsi vs Coca-Cola.

The beverage in this case is Wanglaoji—a fabled tea drink made from mint, honeysuckle and other herbs, which dates back nearly 200 years. Two firms, state-owned Guangzhou Pharmaceutical Group and Hong Kong-based Jiaduobao Drink & Food Co, have been fighting over it since at least the early 2000s. And the fight is only heating up.

Both manufacture the tea, but Jiaduobao’s version, in red cans, has been more popular than Guangzhou’s Group’s version with the same name, which comes in green paper boxes. As of December, Jiaduobao was the top seller of canned drinks in China for the fifth year in a row, ahead of Coca Cola, and held 73% of the China’s herbal tea industry. Guangzhou Group’s brand, WangLaoJi, held only 9%.

Last year, as Chinese soft drink consumption weakened and tea drinks became even more popular on the mainland, the rivalry intensified. A state arbiter ruled last May that Jiaduobao, which had licensed the Wanglaoji trademark from Guangzhou, could no longer use it because it had been secured by bribery. (Jiaduobao continues to make the tea under the Wanglaoji name, but has changed its own name to JDB to get around the ruling.) Last July, both companies filed lawsuits claiming ownership of the now iconic red can. That was the subject of Monday’s hearing, which has now been delayed.

The real fight, however, is outside of the courtroom. Jiaduobao has had trouble finding advertising space in bus stations in Guangzhou because of Guangzhou Group’s government connections, reports Caixin. For its part, Guangzhou Group has run into problems sourcing raw materials for its drink because suppliers have been in exclusive agreements with Jiaduobao. Salesmen of the two companies have been in fistfights, and one JDB employee stabbed a staffer of the rival firm, according to Caixin.

The companies are also fighting for public opinion. Guangzhou Group has joined forces with broadcaster CCTV and Hunan Satellite Television. Jiaduobao has hooked up with a daily news program and a national singing competition.

Most recently, the rivalry has gone online. In February, Jiaduobao’s microblog account posted a series of photos of children crying and “apologizing” for the popularity of the company’s drink (the images below with red type). Another microblog account—which Guangzhou Group denies any connection to—counter-attacked, with photos of happy children and messages like “It doesn’t matter. We want to win, not just in sales but in court too.” Bloggers then made satirical spoofs of the ads (green) using animal pictures and a mocking catchphrase about political privilege. Maybe the two companies would indeed be safer keeping it in the courtroom.

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Jiaduobao: “Sorry!” It’s that we’ve been too selfish and spent the last six years being a national sales leader and didn’t help our competitor.”(Sina Weibo)
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Jiaduobao (right): Sorry! It’s just we spent 17 years building a Chinese … brand to rival Coca-Cola.” Fake account with WangLaoJi (right): “It doesn’t matter. We want to win, not just in sales but in court too.”(theworldofchinese.com)
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Netizens parodied the campaign (right, in green) by using a phrase made popular after the son of a Chinese official tried to avoid punishment for drunk driving by citing his father’s name. It says in Chinese: “It doesn’t matter! Wherever you came from, your dad is Li Gang.”(Sina Weibo)

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