Kolkata, Aug 24 (IANS) Implementation of the Goods and Services Tax (GST) regime will have an inflationary impact, leading to increase in tea prices, Tata Global Beverages’ Chairman Cyrus P. Mistry said on Wednesday.
“GST will have an inflationary impact on the prices of tea, but this will be across the board,” he said while responding to a query of a shareholder at the company’s 53rd Annual General Meeting.
Mistry said that initially that GST will have inflationary impact on the company’s current coffee and tea business as they have a tax incidence.
However, there might be “short-term impact” of the GST but the “long term benefit is significant”, he added.
Mistry said the industry has been making representations for a favourable rate as coffee and tea are widely consumed beverages cutting across economic strata. The company is looking to tap e-commerce platforms to sell its products.
“We are also seeing shifts in the consumption patterns and emergence of alternate channels and e-commerce platforms and your company is looking to tap this segment,” Mistry said.
He said the company will be coming out “soon with something in the digital space”. It is also looking at opportunities in beverages space to expand its business, he said.
On Brexit, Mistry said, “the UK’s exit from the European Union is expected to pose some risks in the trading and buying, which might cause an inflationary impact in some of our businesses.”
According to him, global economic trends remain uncertain, which lowered growth in many markets.
“In a significant development, Starbucks in the US will offer a single origin coffee from India sourced from Tata Coffee Nullore Estate located in Coorg,” he said.
Mistry said this gives customers from outside the country a unique opportunity to experience the rare small lot coffee from these states.
In the developed markets, the company would continue to focus on growing green and speciality tea market share while strengthening its base business in black tea, he said.
“The coffee market in India is poised to grow and our company is well placed to leverage this. We will continue to drive traditional growth through our ventures with Pepsi and Starbucks,” he said.
Global Beverages Ltd (TGBL) reported a 51.94 per cent rise in its consolidated net profit in the June quarter to Rs 119.52 crore from Rs 78.66 crore a year ago. Net sales increased 3.84 percent to Rs 1,711.48 crore from Rs 1,648.12 crore a year ago.