Nestlé and The Coca-Cola Company have agreed to end the ready-to-drink (RTD) tea joint venture (JV) at the start of next year.

Switzerland-based food firm Nestle and the multi-national beverage company The Coca-Cola Company Beverage Partners Worldwide (BPW) started the JV in 2001. It  offers RTD tea in Canada and Europe.

The RTD tea market has evolved since the JV was established and Nestlé decided to develop product Nestea independently.

"Nestlé has decided to develop product Nestea independently."

As per the terms of the agreement, Nestlé will grant The Coca-Cola Company a license to manufacture and distribute Nestea in Canada, Spain, Portugal, Andorra, Romania, Hungary, and Bulgaria. In other countries that are currently part of the JV, The Coca-Cola Company will not produce or distribute Nestea product.

Through its Nestlé Waters division, Nestlé already manages the Nestea brand in several countries, including the US.

This new agreement will enable Nestlé Waters to oversee and manage Nestea operations across all European countries  not covered by licensing agreements.

Currently, the RTD tea category is estimated to be around $4.5bn.