Tata Consumer faces distributor anger over ‘dumped’ stock

A national organization of consumer packaged goods distributors, Tata Consumer Products Ltd. It decided not to accept or pursue sales targets set by the company until the company initiated a “fair dialogue” to resolve what it called long-standing stock “dumping” issues.

Distributors are unhappy with the alleged strategy of the Tata group’s consumer packaged goods arm to promote new brands and acquisitions, including Tata Sampann, which sells packaged masalas, dals, atta and other food staples, and condiment brand Ching’s Secret, which it acquired in 2024.

Tata Consumer declined to comment.

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According to Dhairyashil Patil, national president of the All India Consumer Products Distributors Federation (AICPDF), the crux of the problem lies in Tata Consumer’s consolidation of distribution of various brands.

Patil said, “They have made a lot of changes in the last 1-2 years. Earlier, the company had separate distributors for different brands like Tata Salt, Tata Tea and Sampann. Now, they have started combining the distribution of all these brands.” Mint.

As a result, Tata Consumer claimed that its distributors were often forced to take stock of brands they were not interested in. Some of these brands have limited market appeal, and unsold stock accumulates at company distributors, he added.

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Only in Maharashtra is this stock accumulation worth ₹50-60 crore, Patil said. “Ching’s Secret used to operate much earlier, but now when we ask for a 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 standard practice, they refuse to do so,” he added. This could not be independently verified Mint.

AICPDF representatives wrote emails to Western Region sales manager Sivakumar N. on October 8 and then to general manager and chief executive Sunil D’Souza on October 22 expressing these concerns. With no response from the company, they plan to march to the company’s headquarters in Mumbai on November 4. Mint reviewed a copy of both emails.

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growth factors

Tata Consumer’s consolidated revenue increased by 10% YoY ₹4,779 crore in the June quarter. But its “growth” portfolio of 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.

“We at Capital Foods and Organic India were impacted by some temporary issues, including some capacity constraints, proper adjustment of stocks and supply chain disruptions in exports, as well as imported ingredient pieces,” D’Souza said in an analyst call in July.

“Our focus now is to continue to accelerate growth through innovation and expand distribution here.” he added. These brands won together ₹260 crore this quarter.

“There were a lot of problems and we called. [the issues] it’s temporary because we’ve more or less figured out how to deal with them,” he said in response to an analyst’s question.