New Delhi:ITC Ltd, India’s biggest tobacco maker, will start selling potato chips and a range of other branded snacks as smoking restrictions and higher taxes on cigarettes threaten revenue growth. The foods business has created a “new avenue for growth,” Ravi Naware, divisional chief executive, foods, said.
In the past seven years, ITC has added a range of products such as garments, foods, matches and retail stores to diversify beyond tobacco. It aims to take advantage of demand for processed foods estimated by the India Brand Equity Foundation to rise by as much as 12% a year.
ITC is targeting a 25% share of the branded snacks market in four to five years. This market in India is estimated at Rs2 crore and growing at 30% annually, Naware said. ITC has spent Rs70 crore on the new range of products and plans to spend Rs80 crore in the next two years. Share prices of ITCBritish American Tobacco have declined 18% since the start of the year on the concern that a likely levy of value-added tax on tobacco products by the states may slow sales of its cigarettes.