Earlier this week, a once progressive Sri Lankan entrepreneur walked into the Business Times with a worried look on his face. “If the government goes ahead with the tea hub, it would result in the death blow to the smallholders,” said Ratna Gamage, a man for all seasons.
Remember Gamage? In September 1999, he and six other tea factory owners walked into the World Bank office building in Washington and threatened to launch a hunger fast against unfair trading practices. “"We had to something since the Sri Lankan government wasn’t listening to us," Gamage, a then 33-year old economist who owned a tea factory in southern Sri Lanka, said at that time.
An embarrassed President Chandrika Kumaratunga, Deputy Finance Minister G. L.Peiris and Central Bank Governor A.S. Jayawardene -- in the US for discussions with the Bank -- met the group and persuaded them to call off the protest, promising to consider their demands back in Colombo.
Gamage was leading a campaign on behalf of farmers struggling against cheap imports by transnational corporations. The victims included private tea factory owners like Gamage.
The former tea industry personality no more has a stake in tea, having sold his factory but his attention was drawn to reports last week on the revival of a more than 10-year old debate by tea exporters pushing for cheap tea imports and making Sri Lanka a tea hub.
“I have no stake but as a patriotic Sri Lankan I am concerned. This will hurt 350,000 smallholders and their dependants, a total of 1.5 million people,” he said, adding that most come from Galle and Matara and any threat to their livelihoods could ferment another JVP-revolution. Remember: Smallholders account for 70 % of tea production with the balance by plantation companies!
He says if imports are allowed for blending, cheap grades will come in ostensibly as main grades and certified as such from China or Vietnam. Some exporters will make a fast buck at the expense of the respected Pure Ceylon Tea brand, he says.
In 2000, Gamage went to the Human Rights Commission and the Supreme Court and won a court order banning the import of off-grade teas, such was the tenacity of the man to fight for the fundamental rights of a sector.
The chickens have now come to roost with the revival of the cheap tea imports’ debate. The Tea Exporters Association in proposals submitted in August 2011 say allowing imports will help grow Sri Lanka's share of the world tea market significantly from its current but declining level of 8% to at least 12%; increase the export of Sri Lankan-owned tea brands from Sri Lanka, and establish Sri Lanka as a tea hub.
Opponents say this is aimed at facilitating packing of multi-origin (read: cheap) foreign brands at the cost of developing premium Sri Lankan brands that has a proven market.
Without a doubt it poses a grave threat to tea growers and their communities, global consumer awareness of Ceylon Tea and the development of genuine Sri Lankan tea brands. It is also at cross-purposes with the impending global Ceylon Tea promotion campaign, funded by the export levy, producers say.
Veteran tea industry personality Merrill J Fernando’s no-holds-barred views on this subject are well-known over the past decade. Among many issues, he says the quality of Ceylon tea and its image as the world¹s finest tea will be “irreparably tarnished if free importation of black tea is permitted.’ Changing the policy also goes against the grain of current government thinking in developing a robust local industry and reducing dependency on imports.
Producers say they have no objection to imports of green tea and speciality teas not grown here, subject to strict regulation, which is another bone of contention. “The ‘Tea Export Industry’ is without doubt one of the key drivers in the growth of the Sri Lankan economy,” says the tea exporters in their proposal, a claim which doesn’t hold water and borders on the ridiculous.
For, what about growers, producers, smallholders and plantations? Without a product, there is no exporter/no trader. A producer on the other can sell and market independently without intermediaries. A trader buys the produce here and/or abroad, blends, packs and sells – very much like the garment industry in the early 1980s before this sector became more innovative and is slowly getting into branding.
Regulation and its’ implementation is the keyword and the crux of the issue. In Gamage’s own words, “Anyone can walk into any state institution and get things done, circumventing the rules. We may bring the most stringent rules in imports but – mark my words - the cheap, rubbishy teas will come in and be re-exported as Pure Ceylon Tea in multi-origin packs”.
Even now some packers of well known brands are using the words ‘Pure Ceylon Tea” on multi-origin teas, violating Sri Lanka Tea Board laws. Blended tea with some Ceylon Tea input is only entitled to use the words ‘Packed in Sri Lanka.”While the de-merits undoubtedly outweigh the merits of cheap imports, a more fundamental issue is that tea is the only 100 % local origin export that has stood the test of time for over a century.
Furthermore it is a national asset, a culture and a way of life that must be preserved. Imagine an era where cheap imports flood the market resulting in the tea packed and exported having just a marginal component of Ceylon Tea? What happens then to our plantations which are also now becoming a niche market tourism product with quaint tea bungalows, etc?
Ceylon Tea, also much due to the efforts of the Dilmah Group and its pioneering single origin concept competing against powerful multinational brands, is not only a global brand but provides instant recognition of the country. Foreigners who have not visited Sri Lanka at one time thought it was part of India but were quick to recognize ‘Ceylon Tea’, more than the country itself!
Long term ramifications instead of short term gains are what we need to look at (the bane of our policymakers in whatever we do). What is required is for more Sri Lankan brands to emerge using creative and innovative ways to capture the market similar to how legendary French wines are on tables across the world.
Tea is a culture, a way of life. It is not merely a business and ways of making quick money. It is the only product that (as we said earlier) is known abroad more than the country itself! Permitting large scale multi-origin tea blending in Sri Lanka will potentially lead to a situation where most tea packed in Sri Lanka would contain less than 20 % of Ceylon Tea, with labels however providing emphasis on “Ceylon Tea” inclusion, not only cheating the consumer but also leading to the ruination of an industry, a culture and the natural beauty of Sri Lanka’s carpeted green gardens.
Those involved in the tea industry need to look inwards and resolve more pressing issues like the need for replanting, reducing cost of production, increasing yields and providing government support to create more and more local brands with single-origin tea. The government needs to also consider proposals to extend the plantation leases which end in 30 years, as the replanting gestation period takes 15-plus years.
Ceylon Tea is considered as the best tea in the world. Allowing cheap, uncontrollable tea imports for re-export as multi-origin tea for short-term economic gains will not only fritter away painstaking decades of building the Ceylon Tea brand (first by the British followed by innovative Sri Lankans) but also destroy a lifestyle, a heritage and an integral part of society.
In the national interest, that shouldn’t be allowed to happen.