Financial Times

Tea firms change names amid consumer fair trade concerns
Two regional plantation companies have changed their names in a move to reposition themselves to better reflect the nature of their business in the beverage market and consumer concerns about fair trade and exploitation of labour.

Talawakelle Plantations has followed Bogawantalawa Plantations in dropping the word plantations from its name to be known as Talawakelle Tea Estates Ltd., just like Bogawantalawa Tea Estates Ltd.

"We feel we're not in the plantations business but that we're in the food and beverage category - tea is a beverage," explained Jayampathi Molligoda, Director - Strategic Planning and Projects of Bogawantalawa Tea Estates.

"The original concept was just plantations management but strategically, if you go by the business definition, we can't say we're in the business of plantation management. The business is defined from the customer point of view."

Sri Lanka should sell Ceylon tea as a value-added beverage to earn more foreign exchange in order to reduce dependence on bulk sales of tea as a commodity whose price has risen only marginally in the last 25 years, he said.

"Although, we say that tea auction prices are going up, in terms of US dollars the price increase is just marginal," Molligoda said. "Furthermore, wages are also going up." Customers in the US and European markets view the word plantations as being associated with colonial exploitation of workers and are now more concerned about workers' rights.

"So the word has to go out," Molligoda declared. Industry officials said that the tea plantations had a particularly bad reputation in the past from the point of view of labour standards given the regimented nature of work and life on the estates with issues of child labour.

Some time ago, the official handbook published by the Plantations Industries Ministry even had a separate rate for child workers. The other reason for RPCs to change their names is that consumers look for some authenticity when they buy a product - like buyers who like to buy wines from selected vineyards in France and Australia.

The industry is trying to promote Ceylon tea in the same way as branded products like French wines. "That's where branding of single estate teas is becoming popularised," explained Molligoda. "We want to reflect the firm's correct activities from a marketing point of view and give clients the real tea flavour from our own estates."

Talawakelle Plantations has informed the Colombo Stock Exchange that it has changed its name "to take away the word plantations as it is somewhat colonial and exploitative in today's context."

In the US and Europe, plantations are associated with labour exploitation, the company said. It added that in overseas markets for Ceylon teas the word 'plantations' would not be well accepted, especially in today's context of fair trading practices being given much recognition.

Tea Board chairman Niraj de Mel said the two RPCs, by changing their names, appeared to be trying to change consumer perceptions. "They must be trying to change consumer perceptions, that here is tea coming virtually straight from a bush, and unblended - to create an image of freshness."

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