ANALYSIS OF TATA TEA IN INDIAN TEA INDUSTRY AND ITS COMPARISON WITH HUL

Indian Tea Industry:The tea industry in India is about 170 years old. It occupies an important place and plays a veryuseful part in the national economy. India produces 30% of the total tea supply of world. The totalturnover of Indian tea industry is around 8000 crores. India produced around 945 Kilo tonnes of tea in2008 rising from 850 kilo tonnes in 1999

HERFINDAHL INDEX OF INDIAN TEA INDUSTRYHerfindahl index of Indian tea industry is 0.07. This value is very small and it shows a highlycompetitive monopolistic competitive market. The competition in the industry is mainly based onproduct differentiation. Each company tries to

differentiate its product to cater different customers.Eg. Masala tea, leaf tea, dust tea, etc.There are a large number of companies in the market

Economic Analysis of Tata TeaTata Tea has a market share of around 15% and it lies at second place in the market in terms of value.HUL is the market leader with 20.2% market share while Mcleod Russel lies at 8%. (Figure 3)Tata Tea also suffered in the period 2000-03 due to slowdown in the Indian Tea Industry. Its saleswent down and profit became negligent. But Tata Tea came back strongly in 2004 while still othercompanies were fighting to survive.

COMPARISON OF TATA TEA WITH HULHUL is the market leader in the industry with 20.2% of market share (value). It operates under itstwo brands, Lipton and Brooke Bond under which it has several sub-brands like Taaza, TajMahal,Green Label, etc. Apart from producing tea from its own estates, HUL also

purchases finished goodsfrom third party vendors at cheap rates. The average price at which HUL sells its products is Rs.170/kg which is around Rs. 8 higher than that of Tata Tea which is one of the reasons why HUL hasgreater revenue than Tata Tea.

CONCLUSIONIndian Tea Industry is a growth industry and its domestic demand/consumption is increasing.India is consuming 75% of its total production in domestic market. Although the exports are on thelower side, but they are showing signs of improvement. (Figure 8)The war between both tea giants will continue to be there with both companies making strategies to bethe market leader. HUL has entered into low end segment with its new product “Sehatmand” thuscovering whole of tea market. It has also started aggressive counter advertisement.Tata Tea is planning to keep working on its “Jaago Re” campaign. It is targeting rural markets where

there is large scope of growth as none of the brands is a lot penetrated in the rural market. Tata Tea isalso working to control its costs and so far it has succeeded to some extent. Another move is that it is

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Company History - Goodricke Group Ltd.YEAR EVENTS 1977 - The company was incorporated on 14th June and the certificate of commencement of business was obtained on 27th June. It was formed to take over the Indian business and assets of 8 sterling tea companies comprising 17 tea estates.

- In terms of the scheme of Amalgamation sanctioned by the Calcutta High Court the company acquired the Indian undertakings of the sterling companies as a going concern with all their assets and liabilities as at the close of business on 31st December. The company carries on cultivation of tea and coffee plantations.

- Eight sterling tea companies viz., The Assam-Doors Tea Co. Ltd., Hope Tea Co. Ltd., The Lebong Chulsa Tea Co. Ltd., The British Darjeeling Tea Co. Ltd., The Chulsa Tea Co. Ltd., The Leesh River Tea Co. Ltd., The Danguajhar Tea Co. Ltd., and The Meenglas Tea Co. Ltd., were amalgamated with the Company with from 31st December.

- 14,43,000 No. of equity shares were allotted by the Company to Assam-Dooars Investments Ltd., U.K. and 7,77,000 No. of equity shares of Rs 10 each to Western-Dooars Investments Ltd., U.K. The balance consideration of Rs 60.2 lakhs was retained by the Company as interest free unsecured loan from (i) Assam-Dooars Investment Ltd., U.K. (ii) Western-Dooars Investments Ltd., U.K. both repayble in five equal instalments and the first of such instalments fell due on 1st January, 1979.

1979 - 7,79,986 shares issued for cash at par. 60,000 shares to public financial institutions (20,000 shares each to UTI, LIC & GIC); 59,986 shares to directors, employees and business associates of the Company who are resident Indian nationals and 6,60,000 shares to the public during July-August.

1983 - 6,00,000 bonus equity shares issued in prop. 1:5.

1986 - 36,00,000 bonus equity shares issued in prop. 1:1.

1989 - 36,00,000 bonus shares issued in prop. 1:2.

1991 - 108,00,000 bonus equity shares issued in prop. 1:1.

1992 - Effective 18th May, Tiru Tea Ltd., which has tea estates in the Darjeeling district of W. Bengal, became a subsidiary of the Company.

1994 - The Company's instant tea project with a capacity of 6,00,000 kgs of instant tea powder of both cold and hot water soluble variety made substantial progress.

- The Company received an offer from Himalaya Tea Garden & Farming (Pvt.) Ltd., Nepal to participate in its equity as a joint venture partner and play a role with expansion and modernisation scheme.

1995 - The Company in participation with other major Tea Companies in India, invested in a joint venture company (JVC) project India Blend Pvt. Ltd. This JVC will create a brand image of Indian Tea for sustained exports to the Russian market.

2003

-The Company is restructuring its operations in Darjeeling by selling off unviable tea estates and simultaneously trying to acquire good tea gardens.

-Mr. BN Ghosh, the present Vice President (Finance) of the Company, as Wholetime Director (Finance) of the Company, effective January 1, 2004.

2004

- Has re-appointed Mr. K S David as Managing Director of the Company.

2005

- Tea major Goodricke plans new exclusive brand for south India.

- Appointed Mr. Prodosh Kumar Sen as an Independent Non-executive Director.

2008

- Appointed Mr. A N Singh as Managing Director & Chief Executive Officer (MD & CEO).

2009

- Mr. P J Field has been appointed as Non-executive Director.

2011

- Re-appointed Mr. Arun Narain Singh as Managing Director & Chief Executive Officer (MD & C.E.O).