A fair cup
towards better tea buying
Tea workers - in their own words
Agnes Onyango* works in a medium sized tea farm
not far outside the Kenyan capital, Nairobi. She is
from a province in the far west of Kenya, close to
Lake Victoria.
Agnes is a casual worker. “Every two months we are
fired for two weeks, then we are hired again by the
same person”. The farm provides her with housing
even when she is ‘in between’ jobs.
The pay she says, “is not good, its Ksh. 4.83 (4
pence) per kilo. I have been here a year and the
pay has not gone up. But on other farms, they get
Ksh. 6. I came here from another farm. The owner
heard we wanted to join a union. He sacked all of
us. He brought about five lorries of soldiers who
surrounded us and asked us to vacate the houses.
So we left. They didn’t even pay us our dues”, she
remembers.
She has not heard about Kenya’s minimum wage.
John Masinde* travelled from western Kenya to
close to Nairobi to look for “riziki” (sustenance)
because after completing primary school “there was
no more money”. He has been working mainly on
this farm, as a casual employee, for four years.
Like many in his industry he works six days a week
from 6am. “The only days I don’t come are when I’m
sick.” Time off is a real problem because it translates
to fewer kilos picked, which means less pay. As he
puts it, “your strength determines your pay”. He
is paid Ksh 4.83 (4 pence) per kg of green tea leaf
picked and when production is high can pick over
100 kgs per day.
This is however countered by the dry seasons.
“Then you pick as little as 9 kgs”.
John feels consumers of tea should try paying a good
price so that workers are paid enough. “Maybe they
are paying a good price but we don’t know because
they are far. We are still oppressed. That’s not a
good place to be”, he observes. “But if they buy at a
low price our condition will just get worse. Life will
become as hard as a rock. That is all”.
On a good day Agnes and John earn between Ksh.
386 (£2.87) and Ksh. 579 (£4.27)). In the low season
– which can be three and a half months of the year
– it could be as little as Ksh. 43 (32 pence).
An average family needs around 100 Ksh. (73p)
per day purely for food. On top of this, there is the
cost of cooking fuel, soap, clothing, school books,
medical fees, and other essentials.
A fair cup: towards better tea buying Page 2
Tea supply chain
Tea plucker/worker
Plantation/Estate
Small farmer
Producing country
Collector
Factory
Buying centre
Factory workers
Brokers/auction
Direct sale
(70% of the world’s tea)
(30% of the
world’s tea)
Buying agent
Consuming country
Tea company
Food service/
catering company
Restaurants, schools,
hospitals and work places
Consumers
Retailer
Who’s who – where are you?
Workers
Tea plantations and small tea farmers employ thousands of workers to help
pluck tea, prune and maintain the tea bushes, as well as apply fertilisers or
pesticides as necessary. Workers often have to work in difficult weather
(extreme temperatures and heavy rain) because any delays will affect tea
quality. The quality of tea plucking is a critical factor in determining the final
quality of the tea. Large tea plantations are often in isolated places and
workers are very dependent on the infrastructure (such as schools or medical
facilities) provided by the company.
Producers
Tea is produced by either small farmers on their own land or on large
plantations sometimes owned by tea companies. In some instances collectors
employed by the factory collect the tea leaves from the farmers, and in others
the farmers deliver directly to buying centres or factories.
Factories
Process green tea leaves into green or black tea of different grades within hours
of picking. Some factories are independent, some are owned by a tea company
and some are owned by the farmers. Factories employ significant numbers of
workers on varying shift patterns.
Brokers
Sell tea at auction on behalf of the factories.
Buying agents
Many of the larger tea companies have their own buyers based in the major tea
buying centres of the world or they employ trading companies to make
purchases on their behalf. These agents and buyers have instructions as to what
quality and quantity of tea is required, and when, and are given maximum
prices they are authorised to pay for particular grades of tea.
Tea companies
These companies manage the buying, storage, transport, blending and packing
of their own or supermarket own-label teas.
Retailers
In the UK tea is mainly sold by supermarkets and convenience stores who may
sell their own-label teas, as well as the major brands from the tea companies.
Food service
companies
and caterers
Buy tea largely from the tea companies for sale to canteens, cafés , hospitals
and schools.
Consumers
Drink tea at home bought from a retail outlet as well as ‘out of home’ - for
example at work, in cafés or restaurants.
Governments in Can shape the tea market in their countries through a range of policies
tea producing
including VAT on inputs, tariffs, investment policies, auction regulations and
countries
national labour standards.
Governments in Can shape the tea market through taxes or other restrictions on imports’,
tea consuming
regulatory standards, competition policies as well as by holding companies
countries
accountable for their practices and impacts overseas.
Investors
Can influence the practice of major UK companies, especially the large retailers
and food service companies.
Page 4 A fair cup: towards better tea buying
All about tea
Sri Lanka
150
North India
Kenya
Average
100
Indonesia
South India
Malawi
2005
2004
2003
2002
2001
2000
0
1999
50
1998
This report will outline how the decisions of those who purchase
tea in the UK to sell or serve to the UK public can better recognise
the critical contribution made by tea farmers and workers while
delivering good quality, traceable tea which consumers can trust.2
200
1997
Buyers who work for tea companies or retailers are key actors
within the supply chain. More responsible purchasing practices
can make a huge difference to the livelihoods of farmers and their
workers. Conversely, poor purchasing practices may undermine
the very stability and efficiency of the suppliers’ businesses on
which buyers depend. At the heart of the debate is the question
of balancing risks, responsibilities, and benefits between the
different parts of the supply chain.
US Dollar Cents
250
1996
Tea is the most widely consumed beverage in the world after
water. Behind each cup of tea is a complex supply chain bringing
together some of the world’s most powerful companies with some
of its most vulnerable farmers1. And all is not well. Tea farmers
and their workers are often in a very weak position in relation to
others in the tea industry and reap the lowest rewards. This can
mean pitifully low and often erratic levels of pay.
Average annual auction prices
1996 - 20057
Fast tea facts
• Creating jobs and incomes. In India the tea industry is the
second largest employer with just over one million
permanent workers and a further three million dependent
on the industry. Kenya is the world’s largest exporter and
tea contributes 17 per cent of the country’s export earnings
and employs 10 per cent of the population.4
• Top tea drinkers. The UK is the third largest tea importer
globally and has the third highest consumption per head.5
• Rising production. Globally tea production is rising slightly
faster than consumption creating a situation of oversupply.
The producer price of tea has plummeted by nearly 40 per
cent in real terms since 1980.6
Thousand metric tons
3500
Production
3000
Apparent
Consumption
2500
2000
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
• Major producers. Tea is a tropical product and is produced
in some of the world’s poorer countries. The major
producers are China, India, Kenya and Sri Lanka which
together account for almost three quarters of global
production.3
World production and apparent
consumption of tea 1987-20068
• Stable prices. The retail price of tea in the UK has
remained fairly constant in real terms over the past ten
years. Prices range from as little as £0.30 to £3 for a box of
eighty tea bags.
A fair cup: towards better tea buying Page 5
Tea company buyer – trends and dilemmas
In a competitive field, buyers for UK tea
companies and for the supermarket own-labels
have to be able to get tea onto supermarket
shelves at a competitive price while ensuring
the quality and the unique taste of their brand.
In order to marry these objectives they source
different teas from around the world to get the
right appearance and taste at the right price.
Often this will mean as many as 30 different teas
from several countries are blended together in a
single tea bag.
Up to 25% Ceylon
(brings a flowery taste
and citrus tang)
Up to 25% Assam
(brings a malty
flavour)
Up to 50% Kenya
(brings a bright,
golden colour)
Components of a Typical English Breakfast Tea Bag.
Each country’s tea is often substituted for cheaper alternatives
There are a number of trends in the UK tea market which are posing new challenges for tea company buyers.
Tea trends
Declining market
UK tea consumption is declining with consumers
preferring soft drinks or bottled water. The value of tea
sales in the UK declined by 12% between 1999 and 2004.9
Growth in speciality tea
Speciality teas (such as single estate) are booming, with
a 50% rise between 2002 and 2004. Fair Trade teas
continue to grow rapidly in both the in and out of home
markets. According to Euromonitor, novel, speciality and
premium products are the “bright young things of the
UK hot drinks market, stealing the limelight from the
stalwarts.”10
Price pressures led by own-label
Supermarket own-label teas have grown rapidly and are
often on the shelf at low prices. Supermarket power is
growing rapidly as they consolidate, giving each a larger
market share.
Standards and traceability
New and increasingly stringent standards apply to tea –
including HACCP (hazard control system), ISO 22000 (new
Food Safety Management System) and the European
Union’s new pesticide residue levels. At the same time
there is a trend towards standards that encompass social
concerns, including the Ethical Tea Partnership and Fair
Trade.
Buyer’s challenge
The competition between tea companies is increasing.
There is a need to ensure greater product differentiation,
to work towards improved traceability and to raise
quality.
Tea companies are under pressure to cut costs - one
obvious way is by securing the cheapest possible source
of tea supply.
New standards put pressure on tea company buyers to
ensure a greater level of traceability, right down the
supply chain.
The UK’s favourite brew
•
•
•
•
Ninety-six per cent of tea in the UK is bought as tea bags and 165 million cups of tea are drunk
each day.11
Across Europe over one fifth of all hot beverages are consumed out of home – particularly in
the workplace.12
Five companies dominate the UK market. Tetley’s (27%), Unilever Best Foods which has
PG Tips brand (25%), Apeejay Group (Typhoo), Bettys and Taylors of Harrogate (Yorkshire Tea)
and Associated British Foods (Twinings and Jackson’s of Piccadilly).13
In 2006, just four large grocery retailers (Tesco, ASDA, Sainsbury’s and Morrisons) accounted for
nearly three-quarters of all grocery sales.14
Page 6 A fair cup: towards better tea buying
Shared responsibilities –
the role of retail and out of home buyers
Buyers who work for the supermarkets, other retail
outlets (such as convenience stores) or for food
service companies supplying the ‘out of home’
market have to consider:
• Keeping prices competitive and matching
promotions of other retailers
• Providing a range of products to respond to
customer demand
• Ensuring maximum product availability
• Supporting innovation and growth of new
products in their category to help differentiate
themselves.
Some supermarket buyers may also have to balance
the need to give their customers choice with the
pressure to promote own-label products.
Because the tea market is declining it is increasingly
difficult for tea retail buyers to achieve growth from
their ‘section’. There are a number of techniques
that they can try, but each of these has knock-on
effects further down the supply chain which may be
at odds with the company’s efforts to source more
responsibly. This can create a worrying disconnect
between company policy and buyer behaviour.
Disabling supply chain
Consumer gets cheap
but mediocre tea posing
possible health and
reputation risk for tea
company and retailer. Tea
consumption declines.
Risk and costs
passed on to farmers.
No bargaining
power with factory.
Low wages and
very poor working
conditions and
standards of living.
Price promotions are common in tea. Usually these
are set out in advance so tea companies are able to
plan for them. But because the tea company often
has to pay the cost of the price cut, there is a drive
to pass these costs further down the supply chain
on to the factory and farmer. Similarly in a declining
market the increasing price pressures - in part led by
own-label - may be directly felt by the tea factories
at the end of the supply chain.
The lack of security of tenure that tea companies
have with many retailers is particularly problematic.
If a supermarket buyer needs to cut costs they may
put the whole of their tea range, or a sub-sector
within it, out to tender. This process is sometimes run
through e-auctions. Bids are often live which drives
the price down and the lack of face to face contact
makes discussion of issues other than price difficult.
This practice can make tea companies vulnerable, as
at short notice they could lose their business with a
big institution or retailer. Given the concentration
in the supermarket sector this could mean large
and sudden losses for the tea company. In turn this
provides a disincentive for tea companies to build
longer-term relationships with their suppliers.
Enabling supply chain
Retailer demands
low prices, frequent
promotions and offers
no security of tenure.
Consumer gets good
quality tea from a
source they can trust.
Tea consumption
increases.
Risk shared,
farmers have good
understanding of the
tea trade, enjoy decent
living conditions and
are productive.
Tea company forced
to cut costs and has no
security to plan or build
relationships - instructs
agent to buy from
cheapest source.
Factory as ‘price taker’.
No idea where tea
goes, the price it makes
or where next order
coming from. Has to
cut costs.
Retailers support their
suppliers through a
contract specifying
a notice period. Pay
sustainable price.
Buyer has no
relationship with
tea factory.
Tea company willing
to pay a good price
in return for a high
quality product.
Instructs agent to
buy from known
source.
Factory has the
information necessary
to improve their
quality and negotiate a
reasonable price
with buyer.
Buyer builds relationship
with certain suppliers to
ensure a quality product
and traceability.
A fair cup: towards better tea buying Page 7
Impact on lives
Despite their importance in determining the quality
of tea, farmers are the most vulnerable in the supply
chain. Pressures originating higher up are pushed
down, translating into increased risk, higher costs
and lower returns for farmers.
to protect them against such shocks and risks. In
Kenya more than 52% of the population live below
the poverty line and life expectancy is just 47.5 years.
In India nearly half of all children under five are
malnourished.15
The implications of this are serious as most tea
producing regions in the world are poor, so farmers
and workers do not have the social security support
This table identifies key areas where buyers affect
the tea factories’ position and in turn that of the
farmers, their workers and their dependents.
Farmers/factories in the best position…
Farmer relationship with factory
Farmers either own, manage or are sufficiently well
organised to be able to negotiate effectively with
factory management.
Farmers/factories in the worst position…
Farmers and their workers are ‘price takers’ - they
are kept waiting at buying centres, there are
delays in collection and the resulting costs not
compensated. There is limited support or extension
from the factory. Middlemen/collectors (sometimes
called leaf agents) take a large slice of the factory
price.
Relationship with buyers
Factories know who their principal buyers are and
what quality and quantity of produce is required,
whether the sale is made directly or through an
auction. There is an established relationship with
buyers which enables factories to plan ahead and
invest.
Factories sell their tea through brokers or
middlemen at auction. They have no idea who
buys it, where it goes next or the price it makes.
Factories with cash flow problems make direct
‘distress’ sales of tea at very low prices.
Support from buyers
Factories are provided with market information
by their buyers, and are helped to make business
improvements - whether to the quality of their tea
or through social programmes such as improved
water supplies or better safety equipment.
No support from buyers at all as no relationship
exists. Farmers do not understand why the prices
they are offered vary so widely, and are not
supported to improve quality.
Price matters
Whether selling through auction or through direct
sales, the factory receives a sustainable price in
return for a consistent supply of good quality tea.
This ensures a living wage to pluckers and factory
workers which can provide decent health care and
schooling for children. It also covers the costs of
meeting quality and traceability standards and of
making other business improvements.
Receive prices below what is needed to survive.
This can translate directly into unsafe working
conditions such as long hours or inadequate
protective equipment. In the worst scenario this
means that pluckers and workers have limited
medical care, are unable to provide education for
their children or eat a sufficient diet.
Helpful standards
Standards are jointly agreed between buyers
and factories/farmers. The standards are locally
appropriate and relate to issues that farmers find
important. The farmers’ and factories’ investment
in meeting standards is recognised in the price
paid.
Page 8 A fair cup: towards better tea buying
Standards are imposed from the outside focusing
on protecting the buyer’s reputation, rather than
on issues that matter to farmers and workers.
Factories have to comply with a multiplicity
of confusing, competing and time-consuming
standards which add cost and threaten their
businesses’ viability without the guarantee of sales.
Dreaming of a better future
Newton Nyambane* has worked as a casual tea
plucker on a large estate in Kenya’s Rift Valley for
eight years. “I am housed though I am temporary.
I work 6 days a week for 8 hours a day starting at
6am. We are paid Ksh. 6.34 (5 pence) per kilo picked.
I earn all my income here. I am a union member.
I have heard of the minimum wage and I save
Ksh.700 (£5.20) every month”.
Despite higher wages than non-unionised workers,
Newton feels that most of the profit is made by the
owner of the farm. “When the bosses say prices are
bad at Mombasa (tea auction), pay becomes bad.
But when the grade (tea quality) is good, the price
cannot go above what was agreed.” Newton eats
only one main meal a day and is only able to afford
to eat meat twice a month.
On his free Sunday, Newton likes taking his children
for bird walks in a nearby forest. “I pray God helps
me to work and save so if they pass primary, I can
pay for secondary (school). If I hear my children want
to become tea pickers, it’s like pain entering my
head. I have struggled in this job for a while. I would
prefer them to be mechanics, or join the army”.
A fair cup: towards better tea buying Page 9
Recommendations
The following recommendations seek to identify
ways to improve purchasing practices to meet
the ultimate goal of ensuring that good working
conditions and basic human rights are respected
throughout the supply chain. This is a discussion
document and we would welcome comments on
the following recommendations to tea company,
own-label, retail and out of home buyers.
Tea company/own-label buyers
Retail/out of
home buyers
Benefit to
buyer
Benefit to
factory and
farmer
1. Develop a relationship with your supplier
Whether buying tea directly or through the auction system,
it is important to develop a relationship with the individual
factories you buy from. As well as helping with traceability,
once you know who your suppliers are you are in a better
position to understand their problems and work together
towards improvements.
It is important
to develop an
understanding
of the tea supply
chain and how
your decisions or
those of the tea
companies you
deal with impact
on farmers and
workers.
Improves
traceability
Builds trust and
commitment
Facilitates
quality
improvements
Improves
transparency
and clarity
about exactly
what product is
required
2. Be clear about the terms and length of the relationship
Develop a contract or memorandum of understanding with
the factories you buy from specifying the length of the
relationship or notice period required for termination of the
relationship. This facilitates trust, loyalty and makes it easier
to make positive long term investments.
Agree a contract
with the tea
companies
you buy from
specifying the
notice period.
This will give
some security
of tenure to the
companies and
enable them
to invest in
building positive
relationships
with their
suppliers.
Facilitates
trust and
loyalty
Allows longerterm planning
and investment
Improvements
in consistency
of quality and
supply
Enables
investment
in social
improvements
3. Work together
Tea factories, tea farmers and their workers are important
partners in delivering a quality tea product. The more you
can work together the better. You could develop specific
programmes that:
• support business or management improvements at the
factory
• help improve tea quality, for example through improved
agricultural extension work
• support improved working conditions for farmers and
factory workers
• provide market information or training to enable factories
and farmers to understand the supply chain
• provide clear communications about pricing decisions.
• help factories to add value to their tea through local
blending and packing operations.
Developing a
more secure
relationship with
tea companies
and paying a
reasonable price
can enable those
companies to
develop more
supportive ways
of working with
their partners
further down
the supply chain.
Facilitates
quality,
business
and social
improvements
Helps farmers
improve quality
and achieve a
higher price for
their tea
Reduces
the risk of
supply chain
disruptions
Leads to better
run, more
efficient factories
Page 10 A fair cup: towards better tea buying
Avoids
reputational
problems
Avoids
potential
reputational
problems
Improves
working
conditions for
tea pluckers and
factory workers
Tea company/own-label buyers
Retail/out of
home buyers
Benefit to
buyer
Benefit to
factory and
farmer
4. Pay a sustainable price for your tea
Paying a sustainable price reinforces positive trends and
allows for real social improvements for farmers and their
workers. At the moment some company buyers simply
instruct their agents to get the range of teas needed in their
blend at the lowest price – but this may mean prices and
therefore wages below the cost of living. This causes social
hardships as well as posing reputational risks.
Consider the
impacts of your
price demands
(as well as
demands for
promotions,
‘loyalty
payments’ etc)
on actors further
down the supply
chain.
Quality
improvements
Improves product
quality, social
standards,
management
and business
performance
If your company
has guidelines
around
responsible
sourcing, make
sure these are
translated
into the way
buyers actually
purchase from
tea companies.
Greater
consumer
trust in
standards.
Instead, together with your chosen tea factories:
• Work out what would be a minimum sustainable
price to ensure that the factory meets its costs of
production, has sufficient capital for investment
and can ensure that farmers receive a living wage
• Instruct your agent to honour this price in direct contracts
or to top up auction price as required.
Standards which help rather than hinder
Tea producers already receive the lowest share of benefits in
the supply chain. In a declining tea market, standards which
place significant additional cost on factories and tea farmers
may serve to undermine - rather than support - the type
of improvements that the standards are designed to bring
about. As a buyer there are a number of issues related to
standards you should consider:
• Ensure that the investment made by suppliers in complying
with your standards is reflected in the price you pay particularly if you are asking them to make major
investments of capital
• Assess the impact of your standards. Are they designed to
benefit farmers and their workers by addressing real needs
or are they designed purely to avoid reputational risk?
• If you are insisting on social standards, develop and review
these in consultation with your suppliers. This will ensure
they address issues that are important to them and do not
inadvertently disadvantage smaller growers. By working
with local actors (such as NGOs or trade unions) you can
develop verification methods which are appropriate to local
needs
• Consider working with other companies to rationalise the
number of standards required – moving towards best
practice and those most locally relevant
• Under pressure to cut costs or source sufficient quantities,
buyers sometimes buy from outside the standards they
require. This sabotages the whole relationship,
undermining trust and confidence, leading to mistrust of
standards or a temptation to ‘fake’ compliance. Instead
work to maintain and improve the integrity of your
standards.
As a retailer or
out of home
buyer make sure
you are aware
of the number
and nature of
the different
food safety and
social standards
schemes
operating,
including their
impact and
credibility.
Reputational
advantage
Leads to more
sustainable
livelihoods for
workers, farmers
and their families
Avoids
reputational
risk
Standards help
rather than
hinder real
quality and social
improvements
Allows
companies
to show
consumers
steady,
meaningful
and verifiable
improvements
for tea
farmers and
their workers
A fair cup: towards better tea buying Page 11
Responsible purchasing in practice
It is not easy for buyers to ensure that
they have a positive impact on the
farmers and workers who produce the
tea they sell. There are no quick fix
solutions or easy answers. However,
buyers are important players in the
chain with considerable power and
opportunity to improve conditions.
Some businesses are already practicing
more responsible purchasing and are
reaping the benefits.
Yorkshire Tea: Quality approach pays
Teadirect: A shift in attitude
Yorkshire Tea is part of Bettys and Taylors
of Harrogate – a family-run business. Their
emphasis is on building relationships. They
only buy from factories where they have built
up good relationships. Even when they buy
through auction they inform that factory what
they have bought from them when they next
visit. This allows them, despite being a relatively
small buyer, to support those factories to
produce the type of tea Yorkshire needs for its
blend.
Teadirect is the tea brand of the UK Fairtrade
company Cafédirect plc. In addition to buying
directly only from known, mostly smallholder,
suppliers and working on yearly forecasts that
allow suppliers to plan, Teadirect operates
in a number of innovative ways. Together
with suppliers, the company holds workshops
annually to review and set a locally appropriate
minimum price based on the cost of sustainable
production. The company sees its suppliers
clearly as ‘supply chain partners’ leading
to a more equitable sharing of risks and
responsibilities as well as benefits from the tea
trade. In fact all partners/suppliers now hold
five per cent of shares of the parent company
and their representatives sit on the Board to
shape strategy.
Tasting with the growers is particularly
important as it allows buyers to discuss
requirements directly with those involved in
production, helping them to adjust production
techniques to what works. They believe that
their success is intrinsically linked to that of the
grower and they are happy to put their money
where their mouth is. They have concrete
quality incentives - if a factory produces exactly
the right type of tea for them they are paid
a price premium. There are clear commercial
benefits for Yorkshire Tea to this way of doing
business. They have tailor-made quality product
from producers who they know and trust.
This allows them to plan for the growth of
their brand. And despite the declining UK tea
market, Yorkshire Tea is growing in value and
volume year on year.
Page 12 A fair cup: towards better tea buying
In terms of working together and
demonstrating long-term commitment,
Teadirect has been supporting its partners’
factories over many years in a variety of ways to
strengthen their business capabilities and skills.
Some recent examples are assisting factories’
efforts to become HACCP compliant, find
new markets, improve quality and in Uganda
supporting a factory to develop local tea
packaging facilities. This approach is delivering
tangible benefits - Teadirect is growing at over
seven per cent year on year.
Wider recommendations
All the different actors in the tea supply chain
have a role to play in making sure that risks and
opportunities are more fairly balanced.
Individual consumers
• Ask questions at work or in cafes about how
tea is purchased. With enough pressure from
consumers, supermarket and tea company
practices will start to change.
• Ask the tea company you buy from to tell you
where and who they buy their tea from. Do they
chop and change depending on where they can
get the cheapest deal or do they commit to a
group of suppliers over a longer time period?
• Demand more information from the tea
companies about their pricing policies –
especially if its cost less than 1p a tea bag! Ask
them to publish what they pay and how much
tea workers are paid.
• Demand more information from tea companies
and retailers about the impact of their efforts to
be more responsible – has this just added to the
pressures that factories and farmers face or has it
brought real benefits?
• Put pressure on the UK Government to
implement the recommendations below.
Investors
• Understand and take into consideration the
impact that the purchasing and pricing practices
of the companies you invest in have on the
viability and profitability of their supply chain
partners – on whom they depend for the final
product. If you are not happy with their
practices, consider moving your investment.
UK Government
• Support tea farmers to have a stronger voice in
international bodies as well as in EU or private
sector standards setting.
• Ensure that aid programming does not
contribute to the global oversupply of tea.
• Support the initiative that African countries’
have taken at the WTO to improve policies for
producers of primary commodities, including
mechanisms such as supply management and
greater value-addition in-country.
• Support initiatives which help farmers to
organise themselves into groups to help with
joint marketing, buying inputs or negotiating
prices.
• Investigate the impact that the concentration of
buying power in the hands of a few retailers and
a few brands has on competition, consumer
choice and on international development targets
such as the Millennium Development Goals.
• Ensure UK companies understand, report on,
and are held accountable for, their actions
overseas.
A fair cup: towards better tea buying Page 13
Buying Matters
Traidcraft Exchange is the UK’s only development
charity specialising in making trade work for the
poor. In collaboration with local partners we work
to create opportunities for poor people to harness
the benefits of trade, helping them to develop
sustainable livelihoods and offering them hope
for a better future. Traidcraft also aims to use the
experience of its sister fair trade company, Traidcraft
plc, to improve wider trade practices.
This report is part of The Responsible Purchasing
Initiative’s work to improve the purchasing practices
of EU companies so that minimum human rights
standards are realised by the workers and farmers
in the developing countries involved in producing
products.
We would welcome your feedback on this report.
Please e-mail your comments direct to:
[email protected]
Or visit our website www.responsible-purchasing.org
Acknowledgements
We would like to thank all those businesses, researchers,
investors and NGOs who have helped in compiling this
report. In Kenya we would particularly like to thank Jacob
Omolo of IPAR for the initial research and Ian Gatere of IEC
Strategy Ltd for researching and writing the case studies.
Photo credits
Cover photo by Shailan Parker.
All other photos by Charles Kamau, IEC Strategy Ltd.
References
* Names have been changed and faces blurred to protect the identity of these workers.
1 Throughout this report ‘tea’ is used to refer to products made
from the shrub camellia sinensis, whether green tea or black
tea. Tea made from fruit or herbs is not included.
2 The report draws on research conducted for Traidcraft by
Jacob Omolo of IPAR in Kenya, “Impact of UK Purchasing
Practices on Small and Medium Business in Kenya”
September 2006.
3 International Tea Committee, Annual Bulletin of Statistics 2006
4 Tea Board of India, Tea Board of Kenya, websites 2007
5 International Tea Committee, Annual Bulletin of Statistics 2006
6 Food and Agriculture Organisation “The State of Agricultural Commodity Markets” 2004
7 International Tea Committee, Annual Bulletin of Statistics 2006
8 International Tea Committee, Annual Bulletin of Statistics 2006. Please note these figures are approximate and are based on the assumption that all tea retained in producer countries and all imports into countries have been consumed.
9 Mintel, Tea and Herbal Tea, UK Market report February 2005
10 Euromonitor “Hot Drinks in the UK” Executive Summary
August 2006. Speciality tea figures from Mintel 2005 as above
11 UK Tea Council website 2007
12 UK Food and Drink Federation Out of Home Group various,
see www.outofhome.org
13 Mintel Tea and Herbal Tea Market report February 2005
14 UK Competition Commission, Emerging Thinking, January 2007
15 United Nations Development Programme Human Development
Report 2006
Traidcraft Exchange
Unit 306
16 Baldwin’s Gardens
London
EC1N 7RJ
UK
Tel: +44 (0)207 242 3955
Fax: +44 (0)207 242 6173
Email: [email protected]
www.traidcraft.org.uk
The publication of this report has been funded
the Department for International Development