The Hindu : Business : India gears up to win back Russian tea market

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Saturday, Sep 22, 2007
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India gears up to win back Russian tea market

Vladimir Radyuhin

Tea Board signs MoU with the association of Russian tea and coffee companies

Targets growing market of high-quality tea
To promote premium teas under Assam, Darjeeling and Nilgiri brands

MOSCOW: Indian tea companies are planning to launch a $3-million promotion campaign to rebuild the good reputation of Indian tea that slipped after the breakup of the Soviet Union.

The main emphasis will be on promoting quality, rather than quantity of Indian teas exported to Russia, Tea Board of India Chairman Basudev Banerjee said.

“I will be happy ifs export volumes go up, but I will be happier if high-quality tea is exported to Russia,” he told a business meet with leading Russian tea operators here on Thursday. Mr. Banerjee leads a 20-member delegation of Indian tea producers and exporters to Russia.

India, traditionally the biggest player in the Russian tea market, in recent years has ceded its leadership to Sri Lanka. Indian tea exports to Russia have declined sharply from 113 million tonnes in 2000 to 32 million tonnes last year.

Experts said Indian tea sales in Russia suffered because of massive imports of low-quality CTC teas when the purchasing power in Russia tumbled during the post-Soviet economic crisis of the 1990s.

The Tea Board now hopes to restore the leading positions of Indian tea by targeting the fast growing Russian market of high-quality teas. It plans to promote premium Indian teas under geographical brands of Assam, Darjeeling and Nilgiri.

A selection of teas from the three regions was presented at a tea tasting session during the Indo-Russian business meet.

Russian officials approved the proposed strategy.

“With incomes in Russia rapidly rising, it is a highly competitive market today, those who offer better quality teas win a bigger market share,” said Sergei Seryogin of the Russian Ministry of Agriculture.

The Tea Board of India on Thursday signed a memorandum of understanding (MoU) with Roschaikofe, the association of Russian tea and coffee companies, which calls for joint efforts to encourage imports of high-quality teas to Russia through information exchanges, mutual help in training tea-tasters and joint promotion campaigns.

Russian businessmen urged India exporters to set up joint ventures with Russian tea-packing companies that captured dominant positions on the Russian market after the Russian government slapped a 20-per cent import tariff on packed teas in the late 1990s.

Roschaikofe head Ramaz Chanturia cited as an example a tie-up between the Russian company Avalon and J. V. Gokal, which in recent years has expanded to become one of Russia’s top six tea producers.

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