Pure Ceylon Tea of mother Lanka

Not a commodity anymore to dump with free import junk

Corporate governance perspectives

 The Sri Lanka Tea Board (SLTB) is a body incorporated under Sri Lanka Tea Board Law No.14 of 1975 of the Parliament of Sri Lanka for the purpose of administering, controlling and regulating the tea industry in Sri Lanka.

It is empowered to take measures to regulate the tea cultivation, manufacture, sale, export, import and marketing of tea as provided under the Tea Control Act No.51 of 1957, Tea (Tax and Control of Export) Act No.16 of 1959 and Sri Lanka Tea Board Law No.14 of 1975.

Our tea industry is one of the founder members of the World Trade Organization (WTO) and one of the signatories of the General Agreement on Tariffs and Trade (GATT) negotiations (Uruguay round), of which arose the Trade-Related Aspects of Intellectual Property Rights (TRIPs).

Section 3 of the TRIPs Agreement contains three articles concerning geographical indications (GIs): Article 22 provides for the protection of GIs and Article 23 for additional protection for GIs for wines and spirits, while Article 24 is concerned with international negotiations and exceptions – all articles of immense importance to India in this context.

The Sri Lanka Tea Board is the owner of Pure Ceylon Tea, Ceylon Tea (Sri Lanka, the State) and tea registered quality sign, while the producers, processors, traders, blenders, packers, brokers, exporters, etc. in the supply chain are its facets and embedded stakeholders.

Economy and agriculture are the two main activities in the up country and low country regions. Generating the most employment and revenue is tea manufacturing and has now led to tourist attraction in a big way, I presume as a part of lateral integration.

Ozone Friendly Pure Ceylon Tea means teas cultivated, grown or manufactured in the tea gardens and factories in the tea growing districts of Sri Lanka without use of any ozone depletion substances. Also teas cultivated, grown or manufactured without use of any ozone depletion substances in any of the tea gardens/factories located in accordance with provisions of Tea Control Act No.51 of 1957, Tea (Tax and Control of Export) Act No.16 of 1959 and Sri Lanka Tea Board Law No.14 of 1975 of Sri Lanka, and may be updated from time to time by the SLTB.

Import or do not import issue

There are two sides to any discussion or idea: The side you want to be on, based on your understanding and in-depth knowledge and the other is how patriotic you are to make a serious commitment with the utmost interest to protect the country and industry. It is not simple thinking here; it has to be a broad visionary thinking with a long range plan.

The broker is always a broker where he does not have any interest other than trying to take mean advantage from both sides. He does not have any patriotic thinking in his mind and he wants to exploit if possible both ends. Most of the time traders are also like that. They are not interested in patriotism and if you ask them they will say “What nonsense is that? When the opportunity is there you make a buck and get lost.”

Running tea estates, manning labour issues and biting all kind of production issues are tall orders for traders. They are right, why? When you can easily buy and export tea bulk, why bother? We are making money anyway. Let others do the homework for us.

Such people now need to increase their market share and satisfy their buyer who may now push or control them on pricing equation. They want more bulk to come, if not they want outsource operations to come here. The total volume of production is shared by many buyers and quantity spread is somewhat fragmented. Therefore, they want to create tea imports possibility and turn the market upside down.

The industry’s patriotic people are there and they will only value tea industry values. What is this patriotism? This is an integral part of corporate governance of our tea industry: Pure Ceylon Tea, or Ceylon Tea, of Mother Lanka.

I propose we need to have a public interest in the whole argument, because it is not only the Tea Regulatory Commission, Tea Research Institute and the tea associations that can view the outcome of the decision which will have good or bad effects, but also academics who have a wealth of conceptualised knowledge or factors associating such claims could justify a proposition in the wake of “if free imports,” what would be holistic view, would it harm Pure Ceylon Tea? Hence, it’s a macro application of long range view (beyond five years).

The need to ‘go or no go’ merely does not belong to tea as a commodity but rather as a Pure Ceylon Tea brand.

On our gut feelings, we can take head count as to see how many people are for ‘go’ – that is free imports tea. Next is ‘no go,’ do not free import tea. Let’s take a head count of all those who would want to import and surely you will find the majority would be just tea commodity exporters. Also see the percentage of contribution to the total exports and you will find that they are people who do not care about the country, the suffering the industry has undergone or is on and off going through, the history of our country, its heritage, ethics, image built over the years and people who really suffered for the tea industry to come to this position. They do not even do branding; they don’t care about good or bad blending or marketing and have an attitude of ‘let others do the homework for us and we just export bulk’.

Let’s also analyse the sufferings of others, “do not allow free imports”. These are patriots to the product of Mother Lanka; they strive hard to find international markets, developed own brands/labels, had symposiums and travelled a lot in search of excellence. They strived hard for years, MNCs attacked them. Finally they dictated terms to multinational tea brands, fought back, established niche markets for themselves in a number of countries. And now with a lot sufferings and turbulent market waves, they navigated our tea industry, sometimes without any support from the authorities.

There could also be some possibility where international cartels may be trying through espionage to kill Ceylon Tea or the Pure Ceylon Tea culture totally. I could remember one time the famous Parakum Tinkiri – Perakum Condensed Milk – was totally destroyed by a very strong multinational milk powder company. What they should have done was to continue that brand, but they destroyed with the acquisition. The same thing is bound to happen to Ceylon Tea or Pure Ceylon Tea if the country allows free imports.

Let’s revisit some of the traditional tea markets and look for any progress that has taken place. These ideas naturally surface from the traders doing sales ex-Colombo and must be pressurised for price wars due to regular escalating prices in the domestic market.

The experts are advised by the general public to engage in not mere talks, but serious open dialogue and call for general public correct opinion and proceed to the President’s expert committee review before arriving at a final decision. This is another Parakum Tinkiri killing story well trenched by an organised unpatriotic group.

Recommendations for all concerns

Ceylon identity is carried by this Ceylon Tea brand or Pure Ceylon Tea product; it’s a spiritual product.

It was very difficult to build up Ceylon Tea to this position; no one can put a price tag on it. I still argue even on the brand and enterprise value.

Tea – a commodity changed into a branded tea – Ceylon Tea and the world accepted us and Ceylon is positioned on the world map through this golden tea. Do not think of reversing it. It is a killer strategy all the way if free imports are allowed and not a winning strategy.

Our tea bulk is bought by unknown and known mafias, which in turn sell on their own brands or private labels in the international market positioning as their own teas. This is worse than software pirating (in Sri Lanka earlier it was about a 95% pirated market, now it is about 85%) and those who encourage are the traders who continue to strive hard to kill Ceylon Tea in the long range term (beyond five years).

Market promotions, the development of new markets and stable product positioning within Sri Lanka and outside should be mainly due to extra efforts of genuine tea exporters of Ceylon Tea but not by mere traders.

Our assurance of Pure Ceylon Tea quality and safety and such action is collective responsibility, a force to be reckoned with. It is not the traders who established it, tea lovers did; true lovers of Mother Lanka. The psyche behind is ‘I love a cup of Ceylon Tea, I love it, it’s my health, it’s my life, it’s my way to nutrition and it’s my strength’.

The danger is some are on a strategic move to reposition Ceylon as multi-origin tea hub. After some time, the hub will have a natural death and Ceylon will be converted into multi-origin tea producing country.

By now tea experts in the country should have realised that the critical reasons attributed to remain our country as a raw material supplier – bulk tea or private labels. These brands are not our brands and they are the people who import our bulk tea and brand it under their own brand and private labels and market as their own brands. This should be stopped because it will slowly kill our Ceylon Tea established brand name. If free imports are allowed, it will no doubt accelerate and worsen not only the current Ceylon Tea image, but also the entire tea industry.

If tea imports are allowed, then multi-origin perception will surface and brand identify will have serious implications when branded exporters try to market their established brands. What happens here is that a perception may develop as multi-origin country producing multi-variant brands.

Our value addition and value-chain will be destroyed like injecting insulin if imports are given priority. These are small traders’ views that do not market tea anywhere but sell bulk.

If imports are allowed there will be serious backward integration issues such as new cultivators being demoralised about engaging in good tea plantation as it would price suppressed most of the time. Presently, the producers, cultivators and workers are going through rigorous constraints and at a time of a strike the imports will suppress the worker demand to a greater extent. This may be a hidden agenda of such claimants.

If imports are allowed, local market forces’ supply and demand will not be able to fight a free market battle as a very strong predominantly local tea producing country/industry and voluminous imports will dictate local suppliers a precarious price war dilemma.

Strict vigilance by the Tea Board on the international market, which has been the main instrument in the registration of Ceylon Tea, should be more alert in protecting all the various quality signs in the international markets, because misappropriation is still taking place – according to the allegations of many producers where importers use close to Ceylon Pure Tea or Ceylon Tea infringe brand names as well as corporate colours; examples being the Lion Logo, etc.

All related associations should be called upon to lobby their views.

Authorities should not be played into small group of people who are trying to do things without any advanced knowledge in long-term visioning.

Ceylon Tea – Authorities should bear in mind that our labour force has a major stake in the whole operation, both the quantity and quality of the Pure Ceylon Tea brand, and they should not be kept in isolation when such challenges are thrown by some people having vested interests.

Ceylon Tea is a spiritual brand

When we examine Country of Origin (CO) and brand effects on consumers’ quality perceptions, attitudes and purchase intentions with respect to established brands such as Ceylon Tea or Pure Ceylon Tea, there will be major implications if the CO is positioned as a multi-origin, multi-variant tea hub producer or exporter.

It is important to note country of origin effects were found to be stronger than brand effects for quality and attitude