MACAY Holdings Inc. and Zest-O Corp., two beverage manufacturing and bottling firms majority-owned by businessman Alfredo Yao, have drawn the line when it comes to product strategies and development efforts.
In a disclosure to the Philippine Stock Exchange (PSE), Macay Holdings said it signed letter of undertaking (LOU) set forth by Zest-O on how to govern the product strategies and development efforts of both companies given that their principal shareholder is one and the same.
According to detailed guidelines set forth in the LOU, Zest-O is not to impede the development of Macay Holdings’ products that compete, directly or indirectly, against Zest-O products.
“Zest-O shall not obstruct, impede or otherwise prevent or delay Macay’s development of any food and beverage product that will compete, directly or indirectly, against those produced or distributed by Zest-O at any time, and whether such developments stem from
Macay’s research and development efforts or from mergers, acquisitions, joint ventures, licensing, distribution or other similar arrangements with third parties, or otherwise…
“Zest-O will ensure transparency when selling or transferring property, equipment and facilities to Macay,” Macay Holdings noted in the disclosure.
Macay Holdings has also been given the right of first refusal to any food and beverage product being developed by Zest-O
The letter also authorizes Macay Holdings to be given the priority to develop carbonated soft drinks even if the products are conceived by both Macay and Zest-O, particularly when duplication or conflict-of-interest become the issues on hand.
Zest-O will not develop any product that competes with the products developed by the Macay Holdings.
Macay Holdings is one listed on the PSE while Zest-O is the leading privately-held beverage maker in the country.
Macay Holdings posted a 13.4-percent increase in net income at P1 billion in the first six months of 2015.
The company is now consolidating and strengthening its beverage business after acquiring ARC Holdings Inc., the owner and maker of the RC Cola softdrink brand.
On the other hand, Zest-O manufactures food and beverage novelty brands such as Zest-O, Plus 200 and Fruitsoda carbonated flavored drinks, among others.