Starbucks exits from India: Tata Consumer Products Limited has refuted all the claims that American coffee brand Starbucks is going to close its business in India due to high operational costs and increasing losses. Tata Consumer Products, in a letter to three major Indian stock exchanges, termed these reports as baseless. Starbucks joined hands with Tata Consumer Products in 2012 and started its business in India.
Claim made in The Philox report
On December 19, The Philox, a media organization from Rajasthan, said in a report that Starbucks may soon close its business in India. The news was published with the headline that ‘Starbucks may leave India due to high cost, tastelessness and increasing losses.’
After this news came out, it was speculated that Starbucks is going to close all its outlets in India because people in India are generally conscious of adopting local and affordable options instead of expensive things. However, Philox did not cite any official statement from the company in its report. The report also said that Starbucks’ products are excessively expensive, due to which the company is facing difficulties in earning profits in the Indian market.
A few days after the news that Starbucks may delay opening many of its new stores in India, Philox’s report about the company leaving India came to light.
The company suffered huge losses
According to TCPL’s annual report released in May this year, losses at Tata Starbucks Pvt Ltd, a joint venture between Tata Consumer Products Ltd and American coffee chain Starbucks, widened to Rs 81 crore with high operational costs accounting for just 12 per cent of revenues. It only increased.
However, TCPL denied the news of Starbucks leaving India. Tata Consumer Products, in a letter addressed to the National Stock Exchange of India, BSE and Calcutta Stock Exchange, termed Philox’s report as baseless. The company told CNBC-TV18, the relationship between Starbucks and Tata is strong.
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