Introduction:
The case sheds light on the business policy of Tata Tea Limited, an Indian tea
manufacturer holding second spot after Hindustan Lever in terms of market share in India,
that is in process of taking over Tetley Ltd, a tea bag company ranked number one in UK
and second in world which maintains turnover more than twice than that of Tata Tea’s.
Tetley Ltd produces high value added tea in addition to flavored teas and ensures its
presence in 44 countries. Tata Tea Limited seems to be religiously pursuing expansion via
acquisition along with brand development/enrichment as a business policy.
Quantitative Statements:
•Tata Tea has 56 tea estates in India and 15 tea estates in Sri Lanka.
•About 22-25% tea produced in India is exported and the remaining is consumed in
country.
•Tata Tea grew and reached to the level of Rs.900 crore turnover by 1998-99.
•Tetley produces very high value added tea.
•Tetley also produces flavored tea
•In packet tea Tata Tea is at number two position (24% market share) behind
Hindustan Lever with Brooke Bond and Lipton Brands (45% market share).
•Tetley had a total turnover of around Rs.2240 crores and net profit of Rs.182 crore.
Problems:
Tata Tea Limited faced tough competition in the Indian market and it was at number two
position with the market share of 24%. The market leader was Hindustan Lever with
strong brands including Brooke Bond and Lipton with the market share of 45% of the total
tea market of India. Tata Tea had made attempt for the last 4-5 years to expand its packet
