Tata Consumer Refutes Claims of Starbucks Exiting India as ‘Baseless'

Tata Consumer Refutes Claims: Tata Consumer Products responded to a rumor that American coffee chain Starbucks would soon pull out of India as losses and operating costs rise. It described the rumor as "baseless" in letters filed to the company before three major Indian stock exchanges.

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The baseless report

On December 19, The Philox, a media organization based in Rajasthan, reported that Starbucks could be closing its shop in India. A report with the title "Starbucks to Exit India Due To High Costs, Bad Taste and Mounting Losses," speculated that the hugely popular coffeehouse chain could pack up its bags in India, as high price-sensitive Indian consumers favor cheaper local alternatives.

Starbucks had entered India in 2012 with Tata Consumer Products as its partner, whereas the Philox report hadn't quoted any Tata official and admitted that even "no official statement has been made", for it claimed Starbucks beverages are perceived "overpriced and shallow" in India.

Days later after latently announcing that the soft-serve ice-cream major would delay the launch of new store openings in India, Starbucks India finally issued its official announcement.

As per the report published by TCPL in May this year, the Tata Starbucks Private Limited, the new venture of Tata Consumer Products Limited and American coffee chain Starbucks, saw a revenue growth of 12% for the year 2024 but managed to widen its loss to around ₹81 crore.

Tata Consumer's clarification

That is, however, access to Starbucks that has been denied, as seen in a letter headlined "Clarification on News Article Titled - Starbucks to Exit India Due to High Costs, Bad Taste, and Mounting Losses."

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"The Company would like to state that the aforementioned information in said article is Baseless," Tata Consumer Products said in a letter it forwarded to the National Stock Exchange of India, Bombay Stock Exchange, and Calcutta Stock Exchange.

The company further told CNBC-TV18, "Reports of Starbucks seeking to exit India (are) completely false and baseless. Tata's relationship with Starbucks is strong with shared values and commitment to India."

However, Tata Consumer CEO Sunil D'Souza stated to Reuters Monday that they are holding plans for some new Starbucks stores since fewer customers are walking into its cafes in India.

Google Trends

Starbucks topped the keywords list on Google Search in India on Thursday and gathered interest from users across the vast subcontinent. Related keywords used by people included "Starbucks to exit India" and "Starbucks T Nagar".

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