Developed by Wang Zebang in Daoguang Period in Qing Dynasty around 1830, Wong Lo Kat Herbal Tea (WLK) was introduced to Hong Kong and Macao by Wang’s great-grandchildren with “Tangerine Cucurbit” as its registered trademark. In 1949, all enterprises under the WLK brand in Guangzhou were nationalized and became a part of a state owned enterprise, whereas its business in Hong Kong was still owned and operated by Wang’s descendants. In 1995, Guangzhou Pharmaceutical Holdings Ltd. (GPH) reached a trademark license contract with Hong Kong Jiaduobao Group (JDB), in which JDB was authorized to use the trademark of canned Wong Lo Kat Herbal Tea (CWLK) for 20 years, while GPH continues to produce and sell Wong Lo Kat Herbal Tea in green paper package (GWLK).
In November, 2002, the two parties agreed on extending the agreement for another ten years.
JDB has invested much money and time in the production and promotion of CWLK after authorization. New production bases have been completed at high costs and investment on promotion was also astonishingly high, which included TV advertisements, outdoor billboard advertising and naming various contests and activities, making the red canned WLK (RWLK) well-known to all Chinese almost overnight. It was announced recently by GPH that the brand value of WLK had reached 108.015 billion yuan.
GWLK was produced by GPH in the 1990s with a relatively poor performance in the market. However, GPH decided to redesign GWLK so as to get rid of its bitter taste and to seize market sales by exploiting the rocketing sales of WLK.
A new promotion was launched by GPH after improving the taste which imitated RWLK. The sales volume of GWLK climbed to 710 million yuan in 2007, followed by an increase of 26% in 2009, while CWLK encountered a decrease of 10%.
Frictions between GWLK and RWLK have thus emerged with the increase of the brand value of WLK in recent years. Most of them were initiated by GPH, and the most recent dispute was no exception.
On August 28th, 2011, GPH announced on the interim results conference of its two listed subsidiaries that it would incorporate a pan-health company with WLK as its core brand, which no doubt added fuel to the fire of the discord.
It was decided that the Bestel Fiveleaf Gynostemma Herb Drink (Bestel) would be produced and distributed under the brand name of WLK with gynostemma pentaphyllum (“Fiveleaf Gynostemma Herb” or “Immortal Grass” are its alias) and total saponins (a general term for steroids or triterpene compounds with low sugar) as its core ingredients. This product, once manufactured by Hutchison Whampoa Guangzhou Baiyunshan Chinese Medicine Company Limited (HWBYS) under the brand name of Baiyunshan, may explore new ways of development in the market.
When announcing the interim results, Li Chuyuan, GPH’s general manager, stated that “GHP has authorized HWBYS to carry on marketing and promotion affairs of Bestel under the brand of WLK.” Li also confirmed that GPH would endeavor to look for new marketing and operating models for the development of pan-health products, including cool tea, health wine, cosmeticeuticals, health care products and sports facilities, on the basis of cool tea through full exploitation of the WLK brand in the future.
Actually Bestel is not a new product of GPH and its promotion already began last year. The product being highlighted in the interim results conference is regarded as a prelude to its actual formal launching and it is actually the second time GPH authorized the use of WLK brand. The struggle between GWLK and RWLK is likely to become increasingly heated if GPH succeeds this time.
However, as the actual producer and operator of RWLK, JDB said it was not in a position to comment at present.
A new nutritious drink under the WLK brand was introduced on the 2011 China National Sugar and Alcoholic Commodities Fair in March this year.
This drink is produced by Guang Liang Inc. which has a cooperation agreement with GHP and the license to produce nutritious porridge, lotus seed and green bean powder under the WLK brand. It is reported that JDB has made official protests against GPH and has reported the company to the administrative authority of industry and commerce.
The RWLK-GWLK struggle will definitely become increasingly fierce as the above-mentioned leasing period reaches its due date because the market value of the RWLK trademark is 108 billion yuan now according to estimation. GHP claims that the trademark license contract was actually due in April, 2010; while JDB insists that the authorization does not expire until 2020.
(Translated by Gao Tonghui)
京公网安备 11010802020770号