Ceylon tea gets new boost with world’s first ‘Ozone Friendly’ tag

By Cheranka Mendis

Sri Lanka stamped its mark across the global tea trading nations as the first ever country to receive the ‘Ozone Friendly Tea Status’ from the Montreal Protocol and is all set to double its value by going in for certification marks under Geographical Indications (GI) of the Trade Related-aspects of Intellectual Property Rights (TRIPS) to protect the ‘Ceylon Tea’ brand as well as seven major regional tea growing areas in the country.

The high-flying tea industry, which brought in revenue of US$ 1.4 billion in 2010 with a record production of 319 million kgs of tea, is now ready to play it safe and is set to pull out all the stops in ensuring that the ‘Ceylon Tea’ brand name is protected against counterfeits and bogus players in the global market.

The Sri Lanka Tea Board along with key private sector players yesterday announced the decision to apply for international registration under GI of TRIPS, which falls under the purview of the World Trade Organisation (WTO).



Preliminary measures – which includes the protection of registration under GI for a product in the home country – are already complete, with the Tea Board along with other stakeholders finalising the demarcation of tea factories under each agro-climatic region and receiving Cabinet approval to register the agro-climatic regions along with the ‘Ceylon Tea’ title under the GI mark in Sri Lanka and other foreign countries on behalf of the State.

The regions which represent the main tea growing sections of the country are Nuwara Eliya, Uda Pussellawa, Dimbulla, Uva, Kandy, Ruhuna and Sabaragamuwa.

Director – Promotion of the Sri Lanka Tea Board Hasitha De Alwis stated that the main objective behind achieving certification marks under GI was to “deliver authentic products to the consumers worldwide, achieve international standards, enhance value and market the ‘Ceylon Tea’ brand to a premium value in the competitive international market.”

He stated that the popularity of Ceylon Tea in the market had instigated several companies worldwide to abuse the famous ‘Lion’ logo on behalf of cheap products. Counterfeits recently discovered have been produced from Iran, Russia and China, decreasing the quality assurance and value of the local tea. Initial work for the GI approval started in 2001, he said.

The Ministry of Industry and Commerce announced that Rs. 8.5 million had been set aside for GI branding in 20 countries within 2011, followed by yet another Rs. 8.5 million for the same in 2012.

Adding to the money flow, the Sri Lanka Tea Board would be able to pass on a sum close to Rs. 1 billion for global campaigning from the funds collected under the Development Levy initiated from 1 November 2010.

De Alwis told the Daily FT that under the levy, Rs. 3.50 is kept aside from every kilo of tea exported, with the accumulated sum currently standing at Rs. 650 million.

“We hope to launch the global campaign in September this year and are confident that we will be able to collect a sum in the region of Rs. 1 billion for this purpose. The campaign will be conducted targeting the next winter season,” De Alwis said.

Tea production itself stands to see a growth of at least 10% in revenue by the end of 2011, he added.

“Tea production in the first two months of this year was not so good as the low growns suffered from heavy rains and high growns from too cool a climate. However with the March production we were able to cover up the Jan- Feb deficit. If the weather holds well, we will be able to see a similar production as 2010, but with an approximate 10% revenue growth,” De Alwis told the Daily FT.

It was announced that more money would flow into the industry with Minister of Industry and Commerce Rishard Bathiudeen declaring that an investment of Rs. 18 million would be made for the construction of a laboratory to test for clearance and quality of Ceylon Tea for the benefit of the tea exporters of Sri Lanka. Another Rs. 7.5 million research institute to analyse minimum residue of tea exported especially for the EU and Japan markets are also in the pipeline, Minister Bathiudeen said.



Strengthening trade ties with Iraq

Minister of Plantation Industries Mahinda Samarasinghe and Minister of Industry and Commerce Rishad Bathiudeen will pay a visit to Iraq during the first week of July to strengthen the trade partnerships between the two countries. Bathiudeen would visit Iraq before Samarasinghe.

Samarasinghe, who identified Iraq as a “booming country with so much potential and money,” hinted that he would like the private sector to accompany the Minister so that both parties could have “substantial discussions on special concessions to the local tea industry” during the visit.

“We want to make available Ceylon tea to your countrymen,” he told Ambassador of Iraq to Sri Lanka Kahtan Taha Khalaf at the launch.

Khalaf had made arrangements the Iraqi Minister of Commerce to visit Sri Lanka a few months back and the visit from local bodies to Iraq is on an invitation extended by the Minister.

“We are also more price competitive than other countries and are aiming at further reducing the cost of production while increasing productivity and maintaining quality,” Samarasinghe said, adding that the visit would put in place a strategy beneficial for both countries.