Mukesh Ambani's brand forces Tata Group company to reduce its product price, revenue hit by...

Reliance Retail led by Mukesh Ambani disrupted the beverage market after it acquired Campa Cola in August 2022. The brand with its Rs 10 pack in PET bottle forced the rival beverage makers to reduce their prices to retain their market share and growth. Now, Tata Group's Tata Consumer Products Ltd (TCPL) beverage business got a hit from the aggressive pricing from rival Campa Cola, forcing it to go for a downward revision of its Tata Gluco Plus.

TCPL revenue from its ready-to-drink business declined 11 per cent in the September quarter owing to "competitive pricing action", said its Managing Director and CEO Sunil D'Souza during the post-result investors' call. Reliance Consumer Products, the FMCG arm of Reliance Retail Ventures Limited, acquired Campa Cola from Pure Drinks Group in August 2022 for Rs 22 crore.

When asked about the penetration and growth, without naming Campa, D'Souza said: "A new player coming in with a different price point disrupted the industry. While on paper it is Rs 10 versus Rs 10 ... It didn't surface quickly enough ... While the Rs 10 was the same to the consumer, the trade price was dramatically different." However other big multinationals such as Coke and PepsiCo "adapted their pricing on the trade very, very quickly. We did not," he said.

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"We were roughly about, I would say about 30% premium to competitor and about 20% premium to the multinationals in terms of price to retail. Now, just as a perspective, we know at that price to retail, that is not sustainable. And the loss is roughly Rs 1.50 to Rs 2 per bottle," he said.

"We have corrected some other stuff happening through this thing because of the stress ... When a business is stressed, there are ten other things which pile up. We took that in our stride in September and it's cleaned up. And we do expect, by end of this quarter we should be back to our 25-30% growth levels." 

Though Campa's availability is still limited in some markets, it is offering more affordable pricing compared with Coca-Cola and PepsiCo. While the latter two brands sell 250ml bottles for Rs 20 each, Campa is selling 200ml for Rs 10.

(With inputs from PTI)