Japan's Calbee Admits Mistake in Philippine JV Partner

Japanese snack producer Calbee admitted that it made a mistake in choosing rival Universal Robina as partner for its failed Philippines potato chip joint venture, but said it would now focus on Indonesia and China to build on its presence in the region, writes asia.nikkei.com.

"Universal Robina has its own brand, with the same salesmen dealing with both labels," Makoto Ehara, executive vice president of Calbee, told the Nikkei Asian Review. "It sells its own product rather than the combined brands. It is difficult to fully count on a player in the same industry which has similar products," he added. This resulted in both brands competing in the same market.

Calbee set up its joint venture with Universal Robina, one of the largest food and beverage groups in the country, in April 2014 and launched products including potato chips and fries in 2015. However, sales rose just 4% to USD4.4m between 2015 and 2017 and the business returned a total net loss of about USD14.3m over the same period.

Ehara said it had been difficult to differentiate between the joint-venture's premium brand Jack'n Jill Calbee from Universal Robina's original, mass-market brand Jack'n Jill. "We aimed to gain shares among high-end, [PepsiCo's] Lay's kind-of import products category, but the market was niche and sales did not grow... We estimated the runaway deficits would not change for the next decade. We decided to pull out," Ehara added.

Calbee sold its 50% stake in the joint venture to its Filipino partner in September, switching to a licensing agreement under which Universal Robina will continue to produce and sell Calbee products.

Photo source: straitstimes.com