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Expect tea to become dearer globally

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Kunal Bose
Last Updated : Jan 20 2013 | 11:39 PM IST

Tea at the Ritz’s Palm Court with scones and cakes is seen as one of the surviving traditions of Edwardian London. The quintessentially English practice of drinking tea in the afternoon is, however, no longer confined to born manor. It has now become a corporate rigueur in London and other major western world cities.

As the world is struggling to come out of a recession, the worst experienced since the Great Depression of the 1930s, companies of all kinds want their executives to spend less on business entertainment. No surprise, therefore, tearooms in the West are seeing what can be described as a seismic change in their clientele. No offence is taken by clients if there is not going to be a blowout on drinks and dinner as was the routine in good times that lasted till June 2008. People have ungrudgingly settled down well to what is now very fancily described as ‘Power Tea’. What is appreciated is that clients are still being taken out and notes are exchanged outside office environs, though not over champagne but tea.

Tea in China at Ritz or Dorchester has a character which is not given to replication. But now that business entertainers are turning to tea, more and more hotels and also a few top end departmental stores are becoming centres for Power Tea.

John Lewis in London’s Oxford Street, which oozes luxe and is a natural destination for the smart well-heeled crowd, has thought it wise to start its own Power Tea. A John Lewis official says, “There has to be a buzz in the air for a business meeting and this is certainly the case between 4 and 6 pm when ‘Power Teaers’ arrive in good numbers.”

The loss of custom for bubbly and stronger alcoholic drinks is boosting the fortunes of tea, but of classier varieties where India largely and Sri Lanka to a lesser extent rule the roost. Here volume is not the issue. The new phenomenon of Power Tea, which is roping in more and more people in society’s upper echelons to romance the tradition of tea drinking is proving to be a booster for the beverage. Tea no doubt is the flavour of the season.

Whatever may be happening to the British economy, the tea section at Harrods in London’s Knightsbridge is now busier than ever. Connoisseurs, local or of foreign origin will routinely come to Harrods to pick up organic Darjeeling single origin, Ceylon Highland or Assam first flush. So much given to the beverage they are that what bothers them the least is steep price inflation at the Calcutta, Colombo and Mombassa auctions since January.

Good news for Apeejay Tea that teas are flying off Harrods shelves. Apeejay has been put in charge of choosing Indian teas that Harrods will keep in all its stores. Perhaps more than the fact that he is producing 25 million kg of tea in Assam, his success in acquiring Typhoo, the UK’s third largest tea brand, in 2005 and then raising its profile helped chairman Karan Paul to win the Harrods assignment for Apeejay.

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We may be talking about very expensive teas. But tea is one beverage, which next only to water, is a class buster. Some smart rises in prices at auction centres in Calcutta, Mombasa and Ceylon are no doubt doing the tea industry a world of good since it had to put up with bad times over a number of years at a stretch earlier to 2008. The common tea drinker has, however, reasons to complain about the rising cost of his cuppa. In fact, tea prices behaved so badly over such an extended period that the majority of gardens in all producing countries had to go on postponing rejuvenation and replanting programmes to the detriment of productivity. In many cases, planters burdened with losses could not provide nutrients for tea plants to stay healthy.

But production setback of 10.5 per cent to about 604 million kg in India, Kenya and Sri Lanka in this year’s first half was because of extensive shortfall in rain. Last year, too, Kenya lost 23.7 million kg to 345.9 million kg because of drought. Severe dry weather inflicted production loss of 42 million kg on Sri Lanka till June and the weather forecast for the remaining months of 2009 is not at all encouraging for the tea crop there. The world is reconciled to a significant shortfall in tea supply. At the same time, notwithstanding economic recession, the demand for tea remains exceptionally strong. FAO says the global tea demand rose 4.5 per cent in 2008. Expect tea to become dearer at future auctions.

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First Published: Sep 01 2009 | 1:13 AM IST

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