Analyst Insight by Hope Lee - Senior Beverages Analyst
Generally, Ahmad Tea exports its processed tea to its target markets and relies on local companies to pack, market and distribute them with its guidance. In Iran, Ahmad Tea has established itself for many years and ranks second in tea, and its local partner is Maham Qeshm Trading Co. In 2013, Ahmad Tea experienced a tough time in the face of high inflation and devaluation of local currency, resulting in inflated retail prices in local currency terms. Some shop keepers declined to stock Ahmad Tea, and this reduced availability caused a short-term losses of share. On the top of this, smuggling and counterfeit products are an ongoing issue and threat.
Emerging markets tend to present a relatively high risk in terms of political change and unpredictability, compared to developed markets. Ukraine is also an important market for Ahmad Tea, and the current unstable political situation in this country inevitably poses problems. It is understandable that Ahmad Tea has started to explore opportunities in its British home market, as a more stable alternative.