Tata Tea likely to hike prices

Tata Tea is likely to review packed tea rates shortly in the wake of rising prices of raw commodity.

Sangeeta Talwar, executive director (marketing), Tata Tea, said the company would soon take a call on prices to adjust the upward movement in raw commodity prices.

The price increase could be in the range of 3-4 per cent in the mid to premium segments. Last year, packed tea prices moved up by Rs 8-10 per kg as bulk tea prices rose.

In the current year, bulk tea prices were, on an average, up by Rs 6-8 per kg.

The company, meanwhile, would come out with product innovations, Talwar said, adding that the company was looking at the herbal, fruit and iced tea segments to capitalise on the expertise of its acquisitions such as Good Earth, Jemca and Joeckels.

In terms of offerings, Tata Tea would examine the higher end of the market, or the above Rs 250 per kg segment. Currently, Tata Tea's high-end products are in the range of Rs 200-220 per kg.

The company might streamline some product variants and may discontinue some of the slowest moving brands, Talwar said.

This year, Tata Tea relaunched some of its brands, which resulted in the company taking over the number one position in volume terms in the packed tea segment last month.

"For the first time ever, in June 2007, the company outperformed its nearest competitor with a volume share of 19.2 per cent compared with the competitor's 18.6 per cent," she said.