Tea: Not a gentleman’s trade anymore

By Cheranka Mendis

 Sri Lanka’s tea industry which was envied and admired as the ‘gentleman’s trade’ and a bastion of the highest principles, where the percept of ‘one’s words is one’s bond’ reigned supreme and a high level of disciple was maintained, has changed its course at the hands of motivated seniors in the trade.

Noting the fast deterioration of ethics and values of an industry Sri Lanka proudly boasts of on an international platform, Colombo Tea Traders’ Association Chairman Jayantha Keragala reflected on the current standing of the industry, having fallen from grace as the third largest producer of tea in the world and the largest exporter of tea in the world to fourth and third places respectively.

Addressing the Association’s 119th AGM last week, Keragala stated that his plea to pass on the industry to successors in a equal or better manner than what the present stakeholders received from their predecessors has fallen on deaf ears as senior members of the industry follow unethical practices for personal gains.

 Unscrupulousness led by seniors

“I have observed how senior members in all sectors of the industry spout righteous platitudes on one hand while subscribing to repugnant malpractices on the other, disregarding the fundamentals upon which the industry was developed, with insidious objectives of gaining unfair advantage over their competitors,” Keragala said.

Having tried to introduce fresh initiatives to help the sector keep abreast with the ever-changing demands of the country’s tea industry by identifying priorities in the diverse aspirations of the distinct sectors, he noted that whenever something progressive was proposed, there was resistance without any suitable rationale.

There are contributory factors towards the situation, he said. “In the past, the three main sectors of the industry were manifestly distinguishable, each fulfilling its independent functions with no conflict of interest. However, the lines have progressively blurred and now virtually cease to exist. Overlapping interest and cross investments have muddied the waters and have created a different ethos.”

With the overwhelming proliferation in the numbers of members in each stakeholder sector, competition has intensified leading to the constant quest for means to bolster diminishing bottom lines. Keragala expressed that this in turn, has persuaded some to employ unethical practices by which to achieve this, “affording no consideration to the serious implications this could have on the industry.”

Acknowledged as a ‘gentleman’s trade’ for many decades, the industry should attempt to carry on these characteristics and persist to stand out as a beacon amidst a widespread culture of impunity and malaise of indifference. “This is all changing, shockingly, motivated by seniors in the trade who should aspire emulation as role models rather than serve as deviant examples.”

Keragala pointed out that the Colombo Tea Auction, which is designed to ensure order, transparency, regulation and discipline, is oftentimes seen to be unfairly handled. “There are some whose sole objective is to beat the system by manoeuvring the by-laws and violating the concept of a level playing field,” he divulged. When detected, almost whimsical excuses are tendered to avoid being penalised. “This is not becoming of a noble industry like ours. I implore you to cease demeaning yourself by indulging in such practices.”

 Ceylon Tea has missed the bus

Keragala speaking on Ceylon Tea, acknowledged as the most successful brand the country has ever seen, noted that we have missed the bus, falling from grace from leading the industry to letting others do the leading. Now the fourth largest producer of tea and third largest exporter of tea, why has Ceylon Tea not been able to up its status to its former glory?

The answer lies in Dubai. Without growing a single tea bush and without producing even an ounce of its own tea, Dubai has developed itself into a hub, with all necessary infrastructure to become one of the major suppliers of tea globally. “Sri Lanka was best placed to achieve an even greater success in such an initiative but has lost the opportunity through misconceptions which led to discord regarding the concept,” he pointed out. “It is too late now, we have missed the bus.”

He reminded the industry to be conscious of the vulnerabilities and remarked that we are now dependant on two regions – CIS and the Middle East – for almost 75% of country’s tea exports.

 No progress on global campaign

The trade was expecting considerable funds, accumulated through the Promotion and Marketing Levy introduced in November 2010, to be invested in an aggressive global promotional campaign.

Despite Cabinet approval to release the funds for the marketing campaign, hardly any progress has taken place, he said. “Do we intend on dragging our feet in this endeavour as well and permit competitors to steal a march on us?” he questioned. “The industry must not be permitted to lose faith in the system. We must steer these resources towards the largely untapped markets and create new marketing opportunities.”

 Bigger role of TRI

The Tea Research Institute (TR) has an important role to play, but to do so, it must equip itself with resources to identify higher yielding cultivars and safer and more effective and inexpensive agro chemical pesticides.

With the transition in the classification of tea from a commodity to a food product, overseas buyers, especially those in the Middle East, have focused more attention on the nutritional, hygienic and food safety aspects for consumer health considerations. As such, detecting adulteration and contaminates such as yeast, mould, and coliform bacteria that materialise in tea, at times weeks after production, is an important issue to look into. This situation is said to occur when manufacturing practices are deviated from the conventional form.

The level of moisture content in tea is another issue that needs attention. Determining realistic and viable levels of moisture at each stage in the supply chain to ensure a sound and credible product on reaching the consumer needs to be addressed. “It is critical that smallholders who account for 70% of the green leaf for the industry’s total production should be guided in best agricultural practices and use of organic fertiliser.”

 Insurance covers

Noting that insurance covers for teas stored in brokers’ warehouses has been a vexing issue, Keragala said: “With overlapping insurance covers taken by sellers, brokers and buyers on each lot of tea stored in brokers’ warehouses pending and following sale, not only is an avoidable expense being incurred, but also, in view of an exemption clause, assigning liability, in case of a claim it has become ambiguous.”

Insurance Ombudsman Dr. Wickrema Weerasooria who was the Chief Guest at the event urged those in the industry to get into insurance without dismissing it as a “lot of rubbish forking out premiums.” Dr. Weerasooria said: “Insurance is the prevention or compensation for risk: Do it. Don’t put down this idea as a lot of rubbish forking out premiums. Do a shopping list of the different things that need cover.”

Offering his help, he assured that the tea industry can hold discussions with the insurance companies assisted by him to come up with a product “closer to your heart and pockets.”

 Ombudsman for auction room

Expressing his delight in the decision to have an ombudsman for the auction room, Weerasooria stated that the only issue he foresees are that steep customs the industry is associated with.

Stating that customs are better than law anytime, he said: “You have rules and practices that have been there since 1895. If you are steeped in customs, it is very difficult for an ombudsman to give his view. An ombudsman can say this is my interpretation of the law but the only one who can interpret customs is you, not an outside ombudsman. But this difficulty can be surmounted.”

 Back to basics?

Past chairman of CTTA and well known industry personality Michael Tissera reflected that the industry has a responsibility to see that the tea sector continues as a prestigious and transparent one in the future.

With the industry bringing in considerable foreign exchange to the country, buyers, brokers and sellers must unite to maintain discipline and ethics to take it back to where it was. “I implore you to get together, particularly those in senior positions, to ensure that discipline is maintained in the auction room and outside and that trade reverts to the standard of ethics that it was well known for,” Tissera said.

“I have great faith in the trade – it is resilient and has come through many crises in the past. With cooperation from all of you, it can be turned around once again and set the high standards it was renowned for.”

Pix by Upul Abayasekara