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Lavazza Spa plans to sell its coffee chain Barista as new players threaten margins: Report

By Religare

Italy's Luigi Lavazza Spa is believed to have started talks with various potential investors for its Indian coffee chain Barista, which it had acquired five years ago, at a time when the coffee market in Asia's third largest economy has started maturing with the entry of foreign players and even rising number of such outlets.

A media report said that company has been struggling to maintain its legacy due to the arrival of foreign competitors like Cafe Coffee Day, Starbucks, Dunkin Donuts and Costa Coffee.


Sources also said that company may enter into a possible partnership for the coffee venture to stay in the Indian market and not completely stepping out of it. "It is strategic to Lavazza's overall growth initiatives across the world and there is no intention to move back from this," said a spokesperson to the media.

"Keeping this in mind and to optimise the opportunities in the Indian market, Lavazza is open to strategic partnerships, including agreements, joint management of the cafe chain Barista Lavazza," he added.

Experts said that Lavazza has been looking to focus more on profitable coffee vending business, which it currently operates under the Fresh & Honest and Lavazza brands in India.

The deal comes at a time when Indian coffee market has been maturing and is set to double to USD 410 million by 2017, from about USD 230 million now.

Story first published: Monday, November 19, 2012, 13:30 [IST]
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