Sri Lanka’s famed Ceylon tea industry, currently grappling with various challenges, is charting a course towards regaining its past glory. A recent event organized by the Advocata Institute brought together key stakeholders to discuss and address the pressing issues threatening the industry’s competitiveness and sustainability in the global market.
One of the major concerns identified is the decline in tea quality. Niraj De Mel, Chairman of the Tea Board, emphasized the need to prioritize quality over volume, advocating for a “return to basics” approach to improve prices and regain market share. He acknowledged the potential of digitalization but cautioned against overreliance on it as a solution to all problems in the digital marketplace.
The discussion also highlighted the importance of robust regulation. The effective implementation of existing regulations, such as the Tea Control Act of 1957, is crucial to address quality control concerns and ensure adherence to established standards. Achieving premiumization, a key aspiration for the industry, requires collective responsibility from all stakeholders, as De Mel aptly illustrated by stating, “We should be the Glenfiddich of Tea and not the VAT 69.”
Dasarath Dassanayake, another stakeholder, expressed concern about the drastic changes witnessed in the industry, particularly the decline in labor availability and the rise in refuse tea rates, which have increased significantly from less than 3% to 15%-25%. These issues, coupled with inefficiencies in land management and low replanting rates compared to other tea-producing nations, are hindering overall productivity and profitability.
Dilhan Fernando acknowledged the challenges involved in premiumizing Ceylon tea both domestically and internationally. He emphasized the role of the auction market as a “democratic, relevant marketplace” that helps determine the true value of tea.
The path to revitalization requires addressing multiple challenges. Seeking EU protection for Ceylon tea within the next 12-18 months is a potential step towards enhancing brand recognition and marketability. Additionally, stakeholders need to work collaboratively to address inefficiencies, prioritize quality control, and develop a clear strategy for premiumization. Finally, as Dr. Romesh Bandaranaike, joining the discussion online, highlighted, prioritizing employee well-being within tea companies can contribute to a more sustainable and successful industry.
By implementing these multi-faceted solutions, Sri Lanka’s tea industry can overcome current challenges and reclaim its position as a leading producer of high-quality Ceylon tea in the global market.