Tata Consumer strives for direct market reach

Tata Consumer Products Ltd (TCPL), formerly known as Tata Global Beverages Ltd (TGBL), is streamlining its distribution in the country, as it seeks to expand its direct reach and footprint in the market.

The move comes more than a year after it announced the merger of Tata Chemicals’ consumer business with TGBL to form a consumer products entity that now sells a wide range of packaged goods under brands like Tetley Tea, Eight O’Clock Coffee, Tata Tea, Tata Salt, and Tata Sampann, which sells packaged pulses and spices.

As part of the move, the company last month sent termination notices to over 45 distributors of Tata’s packaged salt and tea businesses. Mint has reviewed a copy of the termination letter that has sought September 7 as the last date for distributors to supply TCPL’s products in the market.

TCPL will now work with its stockist and dealer network directly, as it integrates its food and beverages businesses, a company spokesperson said. “We are integrating the food and beverage businesses of TCPL in India, which will result in benefits such as stronger processes and scale efficiencies. When we reviewed our sales and distribution structures, we realised that it was critical for us to leverage technology and work with our stockist and dealer network directly, to increase our distribution footprint and in-store execution in the market,” the TCPL spokesperson said.

Distributors have raised objections to the move. “They want to change their entire model of distribution. They have taken away a chain of distributors from it, that too with one or two months’ notice period,” said Dhairyashil H Patil, national president, All India Consumer Products Distributors Federation.

TCPL operates 2 million retail outlets in India, it said in its earnings presentation for the three months ending in June.