Lankan tea industry 'vehemently' opposes state attempt to seize tea promotion fund

The running dispute between the Finance Minister Ravi Karunanayake and Plantations Minister Navin Dissanayake over the transfer of funds assigned for a global tea promotion campaign to government coffers took a more serious turn on Monday with the tea industry opposing any such transfer.

“All stakeholders of the tea industry express their unmitigated and resolute opposition to the intention, as reported in the media, of the Ministry of Finance to appropriate the funds accumulated by the Sri Lanka Tea Board, which had been collected from the Industry, for Global Tea Promotion,” six associations said in a media statement issued through the Ceylon Chamber of Commerce.

Minister Dissanayake has publicly opposed a plan by the Finance Ministry for the Tea Board funds collected for the a special global promotion campaign to be channelled to the Consolidated Fund which comes under the Finance Ministry.

Prime Minister Ranil Wickremesinghe, it is learnt, had expressed concern over the public clash and is believed to have told the ministers that such matters should be resolved internally without a public spat.

In the joint statement, the Colombo Tea Traders' Association, the Tea Exporters’ Association, the Sri Lanka Tea Factory Owners' Association, the Planters' Association of Ceylon, the Sri Lanka Federation of Tea Smallholding Development Societies and the Colombo Brokers' Association, appealed to the government “to reconsider this unfair action in deference to the pledge made to the tea industry that the Global Tea Promotion Fund will be utilized exclusively for enhancing market opportunities for Ceylon Tea worldwide, under the stewardship of the Promotion and Marketing Committee of the Sri Lanka Tea Board”.

The statement said: 

“In October 2010, a Tea Promotion and Marketing Levy was introduced by the Sri Lanka Tea Board, whereby a sum Rs.3.50 was charged on every kilogram of tea exported from Sri Lanka, to be used exclusively for the worldwide promotion of Ceylon Tea. On the guarantee provided by the Gazette of the Democratic Socialist Republic of Sri Lanka – Extraordinary No 1677/14 dated Wednesday, October 27, 2010, restricting the use of these funds for tea promotion, exporters readily co-operated in this initiative.

At the outset, the Sri Lanka Tea Board clearly affirmed that, whilst the funds collected by the imposition of this levy would be administered by the Tea Board, the application of the funds would be regulated by representatives of the industry. Accordingly, a Promotion and Marketing Committee was established, with wide industry representation. Since then, despite the successive changes in the Government and Ministers, the autonomy of the Fund, which now stands at Rs.6 billion, was consistently respected and the members of the Promotion & Marketing Committee remain unchanged. Due to various reasons there were some delays to implement promotion and marketing plan, but it is now ready to be implemented.

“The objective in establishing this fund was to conduct promotional activities in order to retain existing markets against strong competition from other origins, regain markets lost to competition and penetrate new markets. Subverting these initiatives would spell disaster for the Tea Industry, which contributes significantly to the country’s economy. It would also diminish the vitality of the potent brand “CEYLON TEA”, which had been developed through the concerted efforts of the Tea Promotion Bureau and its successor the Sri Lanka Tea Board and the Industry at-large, over several decades.

“Unquestionably, the ownership of these funds, contributed by the industry for a very specific purpose declared at the inception, belongs to the industry. An analogy could be drawn to the Sri Lanka Tea Board’s role of administering these funds on behalf of the industry, as a bank administers the funds of its account holders. Notwithstanding the protests of the industry, if the Government intends proceeding with this act, the industry will demand the immediate suspension of the Tea Promotion & Marketing Levy, as it will serve no further purpose.

The tea industry of the country is in an extremely precarious position currently, on account of the decline in world commodity prices and volatile circumstances in many of its key export markets. This will only serve to exacerbate this crisis further. It will also surely imperil the livelihood of the over two million persons directly and indirectly employed by the tea industry, as well as their families/dependents.” - ENDS -