Distributors are unhappy with the alleged strategy of Tata group’s packaged consumer goods arm to push its newer brands and acquisitions, including Tata Sampann, which sells packaged masalas, dals, atta, and other staples, and Ching’s Secret, the condiments brand it acquired in 2024.
Tata Consumer declined to comment.
The core of the problem lies in Tata Consumer consolidating the distribution of several brands, according to Dhairyashil Patil, national president of the All India Consumer Products Distributors Federation (AICPDF).
“They have made many changes in the last 1-2 years. Earlier, the company had separate distributors for different brands, including Tata Salt, Tata Tea, and Sampann. Now, they have begun consolidating distribution for all these brands,” Patil told Mint.
As a result, he claimed, Tata Consumer distributors are forced to take on stock of brands they do not usually deal in. Some of these brands have limited market appeal, and unsold stock is piling up with company distributors, he added.
In Maharashtra alone, this inventory pile-up is worth ₹50-60 crore, said Patil. “Ching’s Secret used to run a lot earlier, but now when we ask for the few stock-keeping units that are popular in the market, the company says they are out of stock,” he said.
“When we approach the company to take back expired or unsold stock, as is standard practice, they refuse to do so,” he added. This could not be independently verified by Mint.
AICPDF representatives wrote emails raising these concerns to Sivakumar N., head of sales for the West Zone, on 8 October and then to managing director and chief executive Sunil D’Souza on 22 October. With no response from the company, they now plan to march to the company’s Mumbai headquarters on 4 November. Mint has reviewed a copy of both emails.
Growth drivers
Tata Consumer’s consolidated revenue grew 10% year-on-year to ₹4,779 crore in the June quarter. However, its “growth” portfolio, comprising newer brands and acquisitions such as Capital Foods (Ching’s Secret) and Organic India, grew only 7%.
This portfolio accounts for 28% of the company’s total business revenue. Tata Tea and Tata Salt are market leaders in their respective categories; however, they lost market share by 80 basis points and 40 basis points, respectively, in the quarter.
“Capital Foods and Organic India, we were impacted by some transitory issues, including some capacity constraints, some rightsizing of inventories and supply-chain hiccups in the export, both as well as imported ingredients pieces,” D’Souza said in an analyst call in July.
“The focus now remains to continue to accelerate growth through innovation and expanding distribution here,” he added. Together, these brands earned ₹260 crore in the quarter.
“There were a bunch of issues and we’ve termed [the issues] as transitory because more or less, we’ve figured out how to tackle them,” he said in response to an analyst’s question.
