Industry
 

Tea is a ‘finished product’ when it is exported by producing countries, but the downstream stages such as blending, packing and marketing are the most profitable operations. These segments of the value chain are controlled by a handful of multinationals: Unilever, van Rees, Finlays and Tata Tea. Their dominant market position enables them to influence world prices considerably. While real prices for tea on the shop shelves remained stable, average real auction prices in the years 2000-2005 were roughly half of those in the eighties. This has further aggravated the uneven value distribution along the supply chain.

 

In contrast to other agricultural commodities such as coffee, cocoa, soy, oil palm and fruits, pressing issues relating to sustainable development and poverty eradication in the tea sector have received much less attention. Along with other stakeholders such as producers, officials and consumers, the multinational tea packers (companies marketing branded tea blends in bags or packets to consumers) have a clear responsibility to address these issues, and their strong position in the market gives them the opportunity to do so.

 

Important players in the tea industry are taking their first steps towards formulating and implementing sustainability policies. The most important industry initiatives so far are:

  • Unilever - with an estimated market share of 12% the biggest player on the global tea market - has committed to certify by 2015 all its tea products according to the Rainforest Alliance (RA) certification system on a global level.

  • Sara Lee - with their Pickwick brand by far the largest tea company in The Netherlands but only a small player on a global scale - has made a commitment to 100% sustainable tea sourcing. At the moment Ethical Tea Partnership (ETP) and UTZ Certified are the production standards of their choice.

  • Besides Sara Lee, 20 other international tea packing companies - among them large global players such as Twinings and Tetley - are also committed to ETP.

  • Major UK supermarkets - such as Marks and Spencer - have decided to source all their house brand teas from fair trade certified producers. However, outside of the UK there is little movement in the supermarket sector with regard to sustainable tea.

 

Even though these initiatives are welcome steps in the right direction, there still remain unaddressed issues even after certification, e.g. the price that is paid to small farmers for their tea leaves.