Goodricke acquires Godfrey Phillips’ tea business for 20 crore

The Goodricke Group has entered into an agreement to acquire the brands of Godfrey Phillips India (GPI) for a consideration of ~20 crore. With this it is aiming to grow its tea retailing business from 9 million kg (mkg) to 14 mkg in the near term, as well as expand its portfolio.

The agreement provides Goodricke control of the Tea City, SC Gold, Symphony, Samovar, SC Premium, Super Cup, Rangoli and Utsav brands hitherto owned by GPI and will provide Goodricke access to over 400 distributors across Jammu & Kashmir, Punjab, Uttar Pradesh, Bihar, Rajasthan and Himachal Pradesh.

The deal gives the rights to Goodricke Group on the trademarks, titles and brands associated with the tea business of GPI but doesn’t include transfer of any physical assets of GPI.

Vikram Singh Gulia, vicepresident at the Goodricke

Group told Business Standard that the company aims to grow its packaged tea business from the current ~175 crore to ~275 crore during 2018-19 and thus the acquisition was the way ahead. “If you see, we have acquired the brands which are present in territories where we are not. Although servicing these brands (formerly) hasn’t been very good in the past, there is no negativity about these brands. Given our focus on tea, I believe we willbe able to grow these brands which we have just acquired,” he told this newspaper.

According to Gulia, the brand recall, pricing and positioning of these brands will help Goodricke gain an immediate revenue surge. He expects to close the current fiscal year at revenues of ~210-215 crore from the packaged tea business.

In the last fiscal year, GPI posted a turnover of ~105 crore from its tea business, which accounted for less than one per cent of the company’s consolidated turnover.

The Goodricke Group’s packaged tea business accounts for about 26 per cent of the company’s annual turnover at ~680 crore and Gulia plans to take this contribution up to about 40 per cent in the coming few years. The company is on the lookout to acquire two gardens in Assam to strengthen its production portfolio.