Ceylon tea brand being misused, Sri Lanka exporter warns
ECONOMYNEXT – Russian brands are causing damage to Sri Lanka’s tea industry by selling tea from other origins under the ‘Ceylon tea’ brand, a top exporter has warned.
Russia and other members of the Commonwealth of Independent States remain import markets for Ceylon tea, though on reduced volumes of bulk tea and value added exports, said Merrill Fernando, chairman of Ceylon Tea Services.
This trend is likely to continue, he told shareholders in the annual report of the company which sells under the Dilmah brand.
Fernando said his previous warnings that demand for Ceylon tea could get reduced if Sri Lankan traders help develop Russian brands had now come true.
“This misfortune is our exporters’ own creation; developing importers’ own brand names at very cheap price levels which are extremely harmful to long-term interests of our tea industry,” he said.
“My warnings, sounded year after year, on this pending danger were not heeded by tea interests or by the government.”
Now, Fernando, said the island’s tea industry has begun to pay the penalty for this neglect.
There was “far less demand for bulk tea resulting in lower prices and negligible demand for value added tea from the very sources that benefited from our exporters’ generosity towards establishing their own brand names at low cost,” Fernando said.
Russian brand names now buy cheaper tea from other sources such as Vietnam, Indonesia and China.
They were “causing serious harm to the quality and image of Ceylon tea by supplying under the same brand names and labeling cheap blends as ‘Ceylon tea’,” Fernando said.
“They inflict even greater harm by re exporting their ‘Ceylon tea’ to other countries at price levels which are 40 – 50 percent below the genuine Ceylon tea exported from Sri Lanka.”
Fernando said all Sri Lankan exporters, as well as Ceylon tea, are paying the penalty for the “folly” of a few tea traders.
“Such are the rewards reaped by our exporters, who helped build Russian brand names at the expense of our own Ceylon tea!” (Colombo/August 14 2015)