Tata Consumer Refuses to Compromise on Market Share Amidst Campa Cola’s Pricing Disruption, Says MD Sunil D’Souza

Tata Consumer Products’ managing director, Sunil D’Souza, stated that the beverage market is experiencing disruption due to Reliance Industries’ Campa Cola, which is offering retailers a much higher margin on its ₹10 packs. This pricing strategy has forced other companies to rethink their own prices.

D’Souza explained that while the ₹10 price for consumers remained the same, the trade price for retailers was significantly different. Many large multinational companies quickly adjusted their prices in response, but Tata Consumer did not follow suit initially. He noted that Tata’s prices were about 30% higher than competitors and around 20% more than multinationals, leading the company to reduce prices in order to protect its market share. “We are here for the long haul and will not forgo market share,” D’Souza said.

The company’s ready-to-drink segment, which includes Tata Gluco Plus, experienced an 11% drop in sales during the quarter ending September 30.

Tata Consumer, which also sells a variety of packaged groceries and operates Starbucks outlets in India, plans to raise prices on tea, coffee, and salt to manage rising input costs due to erratic weather conditions. Despite these challenges, the company’s overall sales grew by 13% to ₹4,215 crore, while net profit remained stable at ₹367 crore. The India business saw a 2% increase excluding acquisitions, and the beverages segment reported a 3% revenue growth.

D’Souza noted that while the rural market shows signs of recovery, urban markets are under pressure. He believes that a good monsoon and a successful kharif crop will help rural recovery, but urban areas are struggling due to rising food inflation. “Stress is being seen across the quick-service restaurant segments, which reflects a broader issue with consumer spending, especially in cities,” he added.

Tata Consumer has also successfully integrated newly acquired businesses, reporting significant growth of 25% in Capital Foods and 45% in Organic India.