UNILEVER, which has moved to take over Lyons Tea, is bidding to capture a share of the market which it failed to do through its own Lipton brand. Despite a major marketing drive, costing more than £1 million, Lipton still only has 5 per cent of the market.
Lyons dominates the Irish tea market, with industry sources estimating its current share at 56 per cent. Barry's Tea, which is based in Cork, enjoys a market share of 28-30 per cent. Bewleys, which distributes its own label tea, claims around 5 per cent of the market and some supermarket chains also market their own teas.
However, the own brand market remains a minor player, unlike in Britain where it has made significant gains against the branded products, sources say. Tea bags comprise around 75 per cent of the market, with loose tea taking the remaining 25 per cent.
In retail terms, the market is worth approximately £40 million a year. Irish people are among the biggest consumers of tea in the world, drinking about 3.1 kilogrammes a year, according to Mr Paul O'Toole, who buys tea on behalf of Bewleys.
Lipton burst on to the scene in Ireland in 1994, with an aggressive advertising campaign. Advertising industry sources said the company booked around 600 poster sites around Ireland and advertised on television in the North and the Republic.
By July 1994, Lipton was claiming an 8.3 per cent share of the market, a claim rejected by Barry's and Lyons. In 1994, it spent £600,000 across all media sectors, advertising its product.
Last year, Lipton rowed back on advertising, spending £250,000 on media related advertising.
In 1994, the total spend by Lipton, Barry's and Lyons was £1.7 million, up from £1.2 million in 1993. However, all three brands spent just £963,000 on advertising.
Ironically, Lyons has been steadily reducing its advertising spend. In 1992, it spent £1.16 million but, by 1995, the figure had fallen to £260,000. The reasons for this are unclear, but one source suggested that there could have been a certain amount of profit protection going on, through cutting of variable costs including advertising.
The question is whether Unilever will promote Lyons at the expense of Lipton. Unilever (Ireland) chairman Mr Jim Rice confirmed last night that Lipton had a 5 per cent share of the market, "which is below what we would like it to be".
He said Unilever would continue to advertise and build up the Lipton brand.
"There is room for both brands and, using marketing skills, we, can attract different consumers, he added.
Advertising industry experts say the tea market does not appear to be very susceptible to promotions. Brand loyalty is also strong.
Irish tea drinkers are also very discerning and will not tolerate poor quality tea, according to industry observers. "If you look at the highest prices which are paid for tea at the weekly tea auctions, you will generally find it's for tea which is destined for Ireland," said Mr O'Toole.
