Tata Coffee, the coffee arm of Indian conglomerate Tata Tea, is mulling the acquisition of a national coffee brand, managing director M. H. Ashraff announced.
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Tata Coffee recently bought a 34.3% stake in the Barista coffee bar chain for Rs26 crore (US$5.5m) and is keen to expand nationally and then even internationally. To kick-start a large-scale expansion, the company is planning to increase its production capacity. It currently has more than 7,000 hectares under coffee and recently acquired a large coffee plantation in Coorg for Rs32 crore, reported India’s Business Standard.
If Tata is to acquire a national brand, it can only be talking about brands held by Hindustan Lever (HLL), but the two companies have not held any brand acquisition talks. Unilever, the Anglo-Dutch parent of HLL, has exited the coffee business, and HLL is one of a very small number of Unilever subsidiaries with a substantial interest in coffee, so HLL might well not be completely averse to the idea of selling off its coffee brands Brooke Bond Green Label and Bru Expresso. That said, Unilever has permitted subsidiaries to continue with businesses if they were ‘local jewels’ – i.e. market leaders.
