‘Tea, a three billion dollar industry in 10 years’
Speaking to over 200 foreign delegates at the biennial Dilmah Tea
Global Distributor Conference in Colombo on Tuesday, Treasury Secretary
Dr. P.B. Jayasundera outlined the way forward for the Sri Lankan tea
industry. Emphatically rebutting arguments made by the Tea Industry
Association (T.E.A.) that the government should allow the importation of
cheap low-quality teas for blending with Sri Lankan tea, Dr. Jayasundera
said that “Sri Lanka should not permit our product to be used in that
manner.” Dr. Jayasundera explaining the government’s position said, “One
product we should uncompromisingly preserve and protect is Sri Lankan
Dr. P.B. Jayasundera
Dilmah has shown that all facets can be developed locally. We believe
Sri Lanka has a tremendous comparative advantage in tea and can make it
a three billion dollar industry in the next 10 years.”
Echoing these sentiments, key stakeholders of the tea industry, which
directly supports over 2.5 million Sri Lankans, warned against the
T.E.A.’s attempts to destroy the world-renowned ‘Pure Ceylon Tea’ brand
by lobbying for the adulteration of this premium beverage.
The T.E.A., which is behind the effort to import cheap low-quality
teas for blending and re-exporting from Sri Lanka, entirely comprises
tea exporters and does not represent the hundreds of thousands of
growers and workers who help sustain one of the country’s most important
industries. For the past few years, the T.E.A. has attempted to argue
that the relatively high cost of Ceylon tea prevents local players from
competing with international brands.
The success of Dilmah, a truly global ‘Pure Ceylon Tea’ brand, and
other Sri Lankan-owned brands, stands in stark contrast to this claim.
After all, Dilmah’s premium single-origin pure Ceylon tea has captured
significant market share at the top end of key markets almost entirely
through the use of the inimitable ‘Pure Ceylon Tea’ brand platform.
Instead of building powerful Sri Lankan-owned premium brands that can
leverage the nation’s unbeatable reputation for quality tea while being
marketed at a premium price, many exporters have unfortunately been
content either to serve as suppliers and packers for foreign giants or
to simply export bulk tea as a commodity.
Indeed, the T.E.A. admits that only 12 percent of exports are under
Sri Lankan-owned brands.
The remaining exports are under foreign brands or in bulk, raw form.
These foreign brand owners constantly pressure suppliers to reduce
prices, which leads, in turn, to price pressure on tea growers.
Refuting the T.E.A.'s attempt to draw a comparison between the tea
and apparel industry, which allows the duty free import of raw material,
Dr. Jayasundera made it clear that the two industries are markedly
different, noting that "tea is the opposite [of the apparel industry].
Everything is here" - a reference to the climatic advantages of
growing various types of tea in Sri Lanka, as well as the smallholders
who grow over 70 percent of 'Pure Ceylon Tea'.
Although he bemoaned the fact that, despite its many advantages, tea
was not as large an export as apparel, Dr. Jayasundera sounded a hopeful
note, pointing to a future scenario where the tea and apparel industries
would be similar in size and together, fly the flag for Sri Lanka around
the world - with tea being "a hundred percent value added, hundred
percent locally sourced product with absolute integrity" and apparel
integrating backwards to manufacture textiles locally and grow cotton in
Industry experts have repeatedly warned that the priceless image of
'Pure Ceylon Tea', built up over more than a century, will be
irreparably damaged if the free importation of foreign black teas is
allowed. Indeed, environmental watchdogs such as Greenpeace, along with
consumer advocacy groups, have recently alerted the media that some
multinational tea brands use Chinese-grown teas that contain dangerous
levels of pesticides and toxins.
If such teas are blended with fine Sri Lankan teas, which are
considered the purest due to stringent controls on growers, the 'Pure
Ceylon Tea' brand may be destroyed forever.
Acknowledging the importance of reforms in the tea industry, Dilmah
Chairman Merrill J. Fernando pointed to the need for concessionary
funding to help replanting by companies and smallholders alike, in order
to reduce the cost of production and increase crop yields.
"These developments are the keys to increasing Sri Lanka's export
earnings in a sustainable manner," Fernando contended. "The pure quality
of 'Pure Ceylon Tea' is a unique, incredibly powerful selling point,"
Fernando continued, calling for the creation of more Sri Lankan-owned
tea brands that can outperform multinational giants, not on the basis of
price but rather on the basis of taste, ethical production and heritage.