NationalStarbucks Won't Leave India; Tata Consumer Denies Reports

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Starbucks Won’t Leave India; Tata Consumer Denies Reports

Tata Consumer Products has dismissed claims that Starbucks might exit India due to mounting losses and high operational costs, labeling the reports as “baseless” in letters to three major Indian stock exchanges.

The Report in Question

On December 19, a Rajasthan-based media outlet, The Philox, published an article titled, “Starbucks to Exit India Due to High Costs, Bad Taste, and Mounting Losses.” The report suggested that the American coffee giant might cease operations in India, citing price-sensitive Indian consumers opting for cheaper local alternatives.

Starbucks entered India in 2012 through a joint venture with Tata Consumer Products. Notably, The Philox report neither quoted Tata officials nor provided an official statement, while claiming Starbucks beverages are perceived as “overpriced and shallow” in the Indian market.

The report also pointed out that despite ambitious plans, Starbucks has struggled to generate significant profits in India. It coincided with Starbucks India’s announcement of delays in opening new stores.

According to Tata Consumer Products Limited’s (TCPL) annual report released in May, the joint venture, Tata Starbucks Private Limited, recorded a loss of ₹81 crore in fiscal year 2024, even as revenue from operations grew by 12%.

Tata Consumer’s Response

In a letter titled “Clarification on News Article Titled – Starbucks to Exit India Due to High Costs, Bad Taste, and Mounting Losses,” TCPL firmly denied the report.

“The Company would like to state that the information in the said article is baseless,” TCPL stated in correspondence with the National Stock Exchange of India, Bombay Stock Exchange, and Calcutta Stock Exchange.

Speaking to CNBC-TV18, Tata Consumer Products reiterated that claims of Starbucks exiting India were “completely false and baseless,” emphasizing its strong relationship with Starbucks, rooted in shared values and commitment to India.

Meanwhile, Tata Consumer CEO Sunil D’Souza confirmed to Reuters that while there will be delays in opening new Starbucks stores, this decision is tied to a decline in foot traffic in Indian cafes rather than any plans to exit the market.

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