Tata Tea, Godrej to sip in local…


September 30, 2006

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Two of India`s top business houses owned by Parsis, the Tatas and the Godrej group are eyeing some of the strongest regional tea brands to gain a decisive edge over each other in the Rs 45 billion branded tea market, reports Financial Express.

Tata Tea, with a market share of 20%, and Godrej Beverages & Foods (GBFL), with less than 10% market share were both in talks to buy regional brands such as the Rs 1 billion Wagh Bakri in Gujarat, Society (under Rs 1 billion) in Maharashtra, Girnar in Mumbai and PJ Hasmukh Chai in the western region.

Incidentally, Tata Tea acquired southern tea brand Agni almost six years ago. HLL, the market leader with 30% share, is not in the race.

Godrej, which recently restructured its tea business into GBFL, has been eyeing regional brands ever since to improve its market share.

Sangeeta Talwar, executive director (marketing), Tata Tea refused to comment on the likely acquisitions, while Godrej Group chairman Adi Godrej said that the company was looking at acquisitions provided there were suitable opportunities.

In the Rs 60 billion packet-tea market, the unorganised sector today accounts for more than Rs 15 billion. Branded tea is expected to register 10% growth this year. In the last two years, the industry has grown between 6 and 8%.

According to analysts, the branded tea sector in India will soon witness a major clash between national players and regional brands.

There are too many regional tea brands that cater to local tastes. For instance, strong regional brands such as Sapat in the northern region, Ganesh Tea in Mumbai and Mohini Tea in Uttar Pradesh are doing well in their regions.

Original article here