Tata Tea, Coke in Tie-Up Talks
In a surprise move, cola major Coca-Cola India and Tata Tea Ltd, the
world's second-largest tea company, are believed to be planning a
strategic alliance to enter new categories in the Rs 69,000-crore
Indian FMCG market. Both companies are in advanced talks in New Delhi
to clinch an agreement, key industry sources said.
"Tata Tea, in association with Coca-Cola, is planning to enter the
enhanced water sector as well as iced tea category in India. Coke
chief Atul Singh held a series of meetings with senior Tata Tea officials
in Delhi," added a source in the know.
When contacted, a spokesperson for Coca-Cola India said, "We will
not comment on market speculation."
Atlanta-based beverage giant Coca-Cola Company has just completed
the acquisition of shares in US energy drink maker Energy Brands Inc
(also known as Glaceau). In May this year, Tata Tea sold its 30% stake
in Energy Brands to Coke for Rs 4,900 crore. Currently, Glaceau's
portfolio includes the brands VitaminWater, FruitWater and SmartWater.
Coca-Cola arch rival PepsicCo India is also planning to enter the
enhanced water sector in the near future. PepsicCo India already has
a strategic alliance with Hindustan Unilever Ltd to market Lipton
Ice Tea across the country.
According to industry analysts, Tata Tea's strategy is in line with
the company's vision of becoming a global beverages player. "Recognising
the tremendous growth potential for value-added water in India, the
company is now joining hands with Coke to enter this niche sector,"
said an analyst based in Mumbai.
The Rs 1,500-crore packaged water industry in India has taken to the
enhanced/energy water segment with unusual zeal. Recognising the need
for energy water in their portfolios, major players are now entering
the niche sector. On June 1, Tata Tea acquired management control
of Mount Everest Mineral Water Company, owners of the Himalayan brand
of bottled water.
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