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Sri Lanka Unilever unit to increase branded tea sales
04 May, 2010 08:41:09
By Riyad Riffai
May 04, 2010 (LBO) – Unilever Sri Lanka (USL) has launched a new brand of tea in the island aiming to increase the multinational's market share of branded teas that carry higher margins, officials said.
The new brand, Brooke Bond Ceylonta, is expected to increase local market share for Unilever branded teas by 1.0 to 1.5 percent in the first year, while sales in the former north-east was zone are seen picking up, they told a news conference.

Sri Lanka's branded tea market has a value of 9.0 billion rupees with over 400 players fighting for market share, Azam Hamdoon, brand manager at Ceylonta said.

Unbranded tea, which makes up 36 percent of the market, is often sold in loose form mainly in rural Sri Lanka.

"We are actually looking at 100 to 150 basis points growth in market share," Asanga Ranasinghe, marketing director, homecare and foods at Unilever Sri Lanka said.

"More than share the aim is to make the branded tea market bigger."

Unilever has a 50 percent market share in Sri Lanka, Samari Ihalagedara, category manager, USL said.

"Branded teas carry a 10 to 15 percent premium over unbranded teas," Ihalagedara said.

The branded tea market had been growing at 25 percent a year but last year growth had slid 50 to 60 percent due to a weak economy, although it was recovering, she said.

Lipton Laojee, another Unilever brand, accounts for 33 percent of total branded tea sales in Sri Lanka.

Sri Lankans consume 25 to 28 million kilograms of tea a year.

Ranasinghe said he expects sales of branded teas in the relatively unexploited north-eastern market would bring rich dividends.

The region is recovering from the effects of a 30-year ethnic war that ended last May.

He said most of the water available in the northern peninsula consists of 'hard' water, which makes high quality tea taste better.

"During the last few years in the northern market only bulk tea was available, either smuggled in from the south or India," Ranasinghe said.

The north-east region would account for about 10 to 15 percent of sales of consumer products firms like Unilever.

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