Kolkata: Tata Tea Ltd’s subsidiary, the Tetley Group, has agreed to acquire the Vitax and Flosana brands in Poland from Premium Foods SA for an undisclosed sum. This to expand its presence in the speciality tea segment.
The latest assets are among a series of niche brands that Tata Tea recently acquired. After the acquisition of Tetley in 2000, the company has expanded through a series of acquisitions ranging from FMALI Herb Inc. and Good Earth Corp. to a 30% stake in the US-based energy drink maker Energy Brands Inc. for $677 million (Rs2,776 crore). The Coca-Cola Co. is reportedly in talks with Energy Brands for an acquisition.
In fiscal 2006, branded tea contributed to 88% of the Rs3,151 crore turnover of Tata Tea, the remainder being from its tea plantations.
Premium Foods SA is one of the leading producers of fruit and herbal tea in Poland. The combined turnover of Vitax and Flosana brands is $23 million. Premium Foods currently distributes the Tetley brand in Poland alongside Vitax and Flosana, which is expected to continue. The company exports to several Scandinavian and European countries and also supplies to global chains such as Tesco Plc., Spar, Kaufland and UAB VP Market.
A statement issued by the company says the acquisition will put Tetley in the number two position in the Polish tea market with a 10.5% market share and a turnover of $36 million. The company did not say what its current position in Poland is.
“There is significant potential to grow the fruit and herbal market in Poland,” said Garry Nield, managing director of Europe and emerging markets, Tetley Group, in a media statement, “and it makes sense for us to acquire an established and successful range of fruit and herbal products, rather than start afresh with a new Tetley range.”
The Tata Tea stock rose to Rs819 during intra-day trading, before closing Rs6 above its previous close, at Rs790. Currently, the Tata Tea Group of Companies, which includes Tata Tea and the UK-based Tetley Group, is the world’s second largest global branded-tea operation, with products and brands in 40 countries.