UNILEVER is to withdraw its Liptons Tea brand from the Irish market after incurring heavy losses in building up only a negligible market
The withdrawal of Liptons from the Irish market should ensure, however, that Unilever's £73 million bid for a majority stake in Lyons Irish Holdings will be cleared by the Competition Authority - as this will now merely involve substituting one owner of the Lyons Tea brand with another, with no change in the market share.
Unilever announced an agreed £73 million bid in February for Allied Domecq's 75 per cent stake in Lyons Irish Holdings, but the bid was referred to the Competition Authority last month by the Minister for Enterprise and Employment, Mr Richard Bruton. The Minister said at the time that in making his decision he "had regard to the existing concentration in the tea market and consumer interests".
At the time of the referral, Lyons had an estimated 56 per cent of the Irish market while Unilever had invested well in excess of £1 million in building up a market share of less than 4 per cent. After incurring heavy losses on launching and later re launching the Liptons brand over the past three years, Unilever has now decided to withdraw the brand.
In effect, by going ahead with the Lyons bid, Unilever will be aiming to buy a market share that Liptons could never have hoped to attain, given the intense competition in the market and the presence of, two exceptionally strong competitors in Lyons and Cork based Barry's Tea. Lyons is thought to have 56 per cent of the market, Barry's around 30 per cent, with Liptons and Bewleys having less than 4 per cent.
Liptons burst onto the market in late 1993 and mounted an aggressive advertising and promotional campaign and by July, 1994, was claiming a market share of over 8, per cent, a claim rejected at the time by Lyons and Barrys. Industry sources said at the time that Liptons suffered from the brand loyalty that characterises the Irish tea market and the fact that Irish consumers are not very susceptible to brand promotions.
Ireland has one of the highest per capita consumptions of tea in the world, drinking about 3.1 kilogrammes a year.
