Financial Times

Understanding the tea leaves
A recent statement was sent out by the Ministry of Plantation Industries in a bid to clear up confusion circulating about the implementation of the European Union’s (EU) Hazard Analysis Critical Control Point System (HACCP). If there was concern that plantations not certified would have their product banned, they need not worry. It seems the wrong message has got out!

The reason is an interesting fact found in the statement that the decision over bringing certified or non-certified tea into the EU was down to the importer. If the importer insisted it was “not because of the European Commission legislation but purely because of commercial reasons”, according to the ministry statement. So, what does it all mean?

According to Mr. D. S. Ratnasingham, director at Watawala Plantations, the certification is not a must but a good move to ensure better quality to a more demanding market. “It’s the correct way to go as tea is a food and the general public is much more educated these days as far as quality is concerned,” he said. The Watawala factory has been certified, he said adding that such a move would lead to higher prices at auction. “As the quality rises, then there is a distinct advantage when it comes to better prices. It’s an extra stamp of approval for the customer.”

At the Tea Association, Mr. G. Dias-Wanigasekera said it wasn’t just about the HACCP certification (which covers the processing and packing side) as an EU tea committee had also recommended a product quality certification that covers pesticide residue, microbiological elements and heavy metal content to further ensure quality, something the Japanese are very interested in too. When asked about how many factories would be covered by the June deadline, he said it was difficult to say. “You have to remember that we have factories here that are over 100 years old, and that takes time and money to upgrade.

The government is offering 50 percent reimbursements for certification fees and training, but not for factory upgrades. Which makes putting time scales forward difficult,” Mr. Dias-Wanigaseke said.

The average capital needed was between Rs. 2-10 million depending on size and age, with an average of Rs. 5 million.

Mr. Dias-Wanigaseke said that as far as importers making the decision over the certification, they can just as easily put the onus on the exporters to do their bidding in the light of what was wanted to access particular markets.

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