Business: People of India love to drink tea. Two big companies selling packaged tea in the country, Hindustan Unilever Limited (HUL) and Tata Consumer Products Limited (TCPL), are going to increase the prices of tea soon. According to a report published in Business Today, the decreasing stock of tea and increasing cost may affect its prices and soon big companies may increase its prices. This will have a direct impact on the price of tea available in supermarkets and customers will have to spend more money.

Talking to Business Today on this matter, a HUL spokesperson has admitted that the cost of tea has increased this season and its direct impact is visible on the tea purchase price. Tea comes under the commodity linked category, so it has become necessary for the company to monitor its prices. The company will consider both its customers and its profits. At the same time, no statement has come from Tata Consumer Products on this matter.

Tea sales account for a large share of both companies

It is worth noting that a large part of the income of FMCG companies Tata Consumer and Hindustan Unilever, which sell packaged tea, comes through the sale of tea. According to the data, tea accounts for 25 percent of HUL's income. Tata Consumer Products, on the other hand, completes 58 percent of its beverage business from the tea business. But the special thing is that both the companies do not disclose their income from tea separately. In such a situation, it is difficult to estimate how much this increase will affect the tea business.

Tata Consumer Products operates a variety of brands such as Tata Tea, Tetley, Teapigs and Tata Starbucks. Brands such as Lipton, Taj Mahal, Brooke Bond and Bru come under HUL.

Decrease in tea production

Assam and West Bengal are the states that produce the most tea in the country. There has been a decrease in tea production in both the states, the effect of which is visible on the tea production from January to July this year. In the last six months, the total tea production in the country has fallen by 13 percent to 5.53 tonnes. Its effect is now visible on the prices of tea. According to the data of the Indian Tea Association, the auction prices of tea have increased by 21 percent in the northern states and 12 percent in the southern states. The price of tea has reached Rs 255 in North India and Rs 118 in the south. Due to this, companies like Tata and HUL have reduced the quantity of tea they buy. Along with this, its effect is also visible on the profit margin of the company. According to officials, Tata is now preferring to buy tea directly from the fields instead of the auction center.

Companies are being forced to increase prices

Tata Consumer Products is now spending 23% more money to buy tea and HUL is spending 45% more money than before. In such a situation, both the companies can increase the price of tea to maintain their profit margin. According to experts, a 1 to 3% increase will not affect the customers much, but an increase more than that can affect the demand for tea. Along with this, many premium local brands have already increased their prices. While increasing the price of tea, companies will have to take special care of both their profits and the pockets of the customers.