Posts Tagged ‘Tea History’

Imagine pristine dewy hills with rolling tea plantations and smiling women picking leaves at their leisure – beautiful, is it not? Trouble is that just about everything in this image is wrong if you just bought your tea from any supermarket. Supermarket teas are the most viciously competed market segment within tea industry and pushing down the price is the most important competitive advantage. So why the low price of supermarket tea is such a bad thing?

Walmart is a market just as the rest of them


Growing tea has been labor intensive from the start. For this reason it has remained dominant farming industry in countries what have very low salaries. However, consumers demand ever cheaper teas and markets are consuming more and more tea, supermarket chains have massive bargaining power over tea farmers and farmers have no way but to cut the costs. Even in low-cost countries this had resulted in the use of machinery and chemicals in tea growing and tea processing as well as the use of pesticides and fertilizers.

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Sir Thomas Lipton is behind all that fuzz, which today surrounds tea that comes from Sri Lanka, and there’s an interesting story behind it.

A photo of Sir Thomas Lipton. It is difficult to see the man from behind that bush of a mustache, but unfortunately it is part of the style of Mr. Lipton. Must have been a fashionable style back then.


Mr. Lipton was a successful retailer and you can read more about the person at Wikipedia. He started with one grocery shop in 1871 and – eventually – was able to expand into a chain of about 400 shops with the help of aggressive advertising and low pricing. Year 1888 he decided to expand into tea and already the following year his organisation sold 4 million lbs of tea. A year later the amount had grown to 6 million lbs. Tea quickly became the most important sales article in his chain of grocery stores and transformed his business.


In 1890 he traveled to Australia and on that trip he made a short stop at the island of Ceylon. One thing you need to know about Mr. Lipton is that he was all for cutting the middleman and selling directly to the consumers. This is the reason why he wasn’t entirely happy to buy tea only at London’s tea auctions. Anyway, let’s get back to the Ceylon.

Those days there had been similar financial crisis as we have now, so the asking price for tea plantations was right, and he ended up buying several tea plantations. His acquisitions tallied only up to 15% of total tea production on Ceylon, but his marketing engine took care of the image and everybody from Britain to the States thought that Mr. Lipton owns the whole island. Even today we think tea when we see the word Lipton.

Roy Moxham wrote about different ways that British King’s used to benefit from the tea trade. The original method wasn’t very successful and was short-lived. For some reason first attempt to tax took place on the retail counter of coffee houses. There was a 3 pence tax for every gallon of sold tea. Now you can imagine what kind of tea that was. It is quite much likely that by pouring boiling water over old pair of used socks one would have been able to make better tea that was offer in London coffee houses between 1660 – 1690.


This is quite simple matter, really. There was no standard given for how tea should taste. This lead into a situation where coffee house keeper was trying to make the most money per used pound of tea leaves. In practice, every coffee house diluted the offered tea to a degree that the taste was close to water and at that time water wasn’t too clean.


Now this was a better idea. There was less problems with the quality and there was an added benefit with collecting the tax. It is difficult to keep up with tens of different sales locations without the aid of computers. It is much easier to collect the tax early in the production chain like for example an importer’s premises, custom houses or wholesale locations. This method of taxing tea finally caught wind into sails and the rest is also history.

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