Wagh Bakri eyes Assam gardens
The third biggest packet tea company in the country, Wagh Bakri, which has so far procured and packaged tea for sale the world over, is now eyeing the source — it wants to buy gardens in Assam.
“We are working on the proposal and will place it before the board for its approval. In the first phase, we may go for three to five gardens having a production of 1 to 1.5 million kg. Proposals are also welcome from owners of medium/small gardens. This will be a win-win situation for both as there will be equity partnership between the producers and our company Gujarat Tea Processors and Packers Limited,” Piyush Desai, chairman of Wagh Bakri Tea Group, told The Telegraph.
“Wagh Bakri is a brand of very good quality tea and as such should have control over kitchens,” he added.
Explaining the decision, Desai said: “Despite our repeated requests, producers have not increased production of organic tea or organic green tea for which consumer market is increasing by more than 25 per cent every year.”
The Rs 700-crore Gujarat-based company, which sources 30 million kg of Assam tea, controls a 15 per cent share of the country’s 360 million kg packet tea market. The top two packet tea companies in the country are Hindustan Unilever Limited and Tata Tea. Desai, who will attend the special tea charity auction to be held here on December 3, supported industries minister Pradyut Bordoloi’s insistence on Assam tea producers giving tea for sale at Guwahati Tea Auction Centre as their first preference.
He suggested full subsidy for tea growers putting up more than 50 per cent of their produce at the GTAC. If the offering is less than 50 per cent, the subsidy should be reduced accordingly. Desai has also been supporting duty-free import of tea. “Of course, any government should take care of the industry by providing protection but it should also maintain a fair pressure by gradually allowing duty free import of tea. This will compel producers to maintain good standards of tea, resulting in good quality tea available to the packet companies who are competing with coffee,” he said.
“Indian tea production is unlikely to show any significant increase but our domestic consumption is growing by three to five per cent per annum. This means that in the next five years we will be a net importer of teas even if we do not export any tea, which is unlikely and neither should that happen,” he added.
On the increased role of small tea growers, who are now producing 225 million kg annually, which is 25 per cent of tea production, Desai said if this sector grows systematically it will be a blessing to the tea industry as its growth rate is faster than that of big tea growers. “But if they grow in a haphazard manner and produce weak quality tea, it will be a big threat to the tea industry,” he said.
• Packet tea market growing 10% annually, loose tea market losing 10%
• Packet tea market comprises 14 major players and 100 regional brands, selling 1 million kg tea annually
• Wagh Bakri markets 35 million kg, of which 30 million kg is Assam tea, 4 million kg from Dooars and 1million kg from South India
• Of the Assam tea segment, 12 million kg is procured from gardens and 18 million kg through auction, of which 8 million kg is from the Guwahati Tea Auction Centre