Anselm warns ad-hoc policies threaten to kill Ceylon Tea industry

• Says cost of tea soar by 36% amid new tax regime
• Asserts tea subjects to 18% VAT, which force companies to pass increased cost onto consumers
• Stresses prices in local supermarkets skyrocketed; a packet of 500g tea is Rs. 1,400
• Opines cost of cup of tea more burdensome for households
• Claims Govt. use IMF as a panacea 
• Criticise local supermarkets for demanding discounts 35-45% to secure shelf space for tea

In a hard-hitting evaluation of the tea trade, industry veteran and Mlesna Tea founder Anselm Perera warned that the Government’s ad-hoc policies are deteriorating the over 150-year-old Ceylon Tea industry, a significant dollar earner and a globally recognised brand. 

Speaking at a recent media briefing held collectively by the plantation industry, Perera underscored the urgent need for more supportive and consistent policies to sustain the tea industry amidst multiple challenges faced by traders and the consumers.

“The tea prices in the market have surged by 36% amidst the new tax regime, impacting both the sector and consumers significantly,” he said. 

Perera highlighted that tea, which was previously exempt from Value Added Tax (VAT), is now subject to an 18% VAT, which has forced companies to pass the increased cost onto consumers, resulting in significantly higher prices for tea available in the market. 

“If you look at the tea prices in the supermarkets, they have skyrocketed. A good packet of tea is around Rs. 550 -1,400. People often complain why it is so expensive when it is being grown here,” Perera asserted at the recently held collective media briefing. 

He pointed out that tea is a staple beverage enjoyed by 99% of the population, irrespective of their status in the society. “Everyone enjoys a good cuppa,” he added.

However, given the increased tea prices in the market, he said that when combined with sugar and milk, the cost of a cup of tea becomes even more burdensome for households. 

Despite appeals to the authorities to exclude tea from VAT, Perera lamented that these pleas were ignored. “The Government is using the IMF as a panacea. I doubt the IMF advised imposing VAT on a commodity like tea,” he claimed. 

Perera also criticised supermarkets for demanding substantial discounts from tea companies, sometimes as high as 35-45%, to secure shelf space for their products. 

“How can companies provide a good product to consumers with such unfair demands? Although it is a loss for the tea companies, they give the discounts so that the brand remains recognised among consumers,” he explained. 

He also said the challenge extend beyond the local market to the international markets, where global supermarkets demand exorbitant fees for shelf space for Ceylon Tea. 

“To get into supermarkets, we have to pay $ 10,000 for one blend of tea. If the product does not work, then that $ 10,000 goes down the drain,” he stressed. 

He elaborated that most of the tea companies are working with great difficulties. “We manage our businesses locally and internationally amidst many challenges, which is not understood or appreciated by the authorities despite repeated discussions and rationalisation,” Perera stated.