Conversations with Tata Consumer Distributors In Western Maharashtra: ICICI Securities Insights
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ICICI Securities Report
While the overall turnover for the distributors has increased post consolidation of distribution network, the income levels of distributors have not materially increased due to approximately 200 basis points reduction in trade margins - that's the insight from our conversation with Tata Consumer Products Ltd.’s dealers in Western Maharashtra.
They told us -
1. bargaining power with retail outlets has increased driven by higher turnover and lower freight cost (lower by ~70%),
2. value-added salt variants such as Tata Salt Lite are performing well,
3. there are good repeat orders for sachets of Tata Coffee Grand,
4. Sampann has limited success in Western Maharashtra and
5. modern trade is now serviced separately by the company (in line with industry practices).
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