Chinese cola-flavor beverage brand, Tianfu Cola has recently denied allegations that it has filed for bankruptcy, after demand for its drinks skyrocketed amid this alarming news.
Tianfu Cola clarified that the entity that is applying for bankruptcy is a previous iteration of the firm called China Tianfu Cola Group Corporation Chongqing, which ceased operating in 2018.
To overcome the consumer frenzy, Jiang Lin, Chairman of the brand’s current producer, Tianfu Kele Chongqing Beverage, has appeared livestream to advise consumers not to stockpile the products in an irrational manner after sales of the drinks on e-commerce platform Tmall soared 1,700% due to the bankruptcy rumours.
The now-defunct China Tianfu Cola Group Corporation Chongqing was incorporated in 1988 with registered capital of Rmb 12.5 million (US$1.8 million). Tianfu Cola was the first domestic cola-flavor beverage, and it became popular after being used at state banquets. The beverage was less sweet and fizzy than US brands such as Pepsi and had Chinese herbal ingredients and a relatively milder taste. It once had 75% share of the Chinese cola drinks market.
Tianfu Cola’s then operator set up a joint venture with Pepsi in 1994, but the JV’s performance was poor. Legal battles followed, and in 2010 Tianfu Cola took Pepsi to court for stealing its recipe for the beverage. The company successively retrieved its trademark and other assets in 2013. In 2018, China Tianfu Cola Group Corporation Chongqing’s shareholder Chongqing Textile Holding Group transferred the group’s related assets to Tianfu Kele Chongqing Beverage, which was set up that year and now owns Tianfu Cola’s trademark.
However, the company is still struggling with losses of Rmb 18.3 million (US$2.7 million) recorded in 2021.
