Did you know that the name ‘Tesco’ is a combination of the names of Jack COhen, the supermarket’s founder, and T.E.Stockwell who supplied him with tea?
Jack – aka “Slasher” Cohen – had an eye for an opportunity. At the end of the Great War he used his demob money from the Royal Flying Corp to buy army surplus food, and sold it to hungry, impoverished, war-weary Londoners on an East End market stall. He made a £1 profit on £4 of sales that day. This year, Tesco made £1,644 million profit on £51 billion of sales. Clever chap!
Tea, provided by Mr Stockewell, was Tesco’s first own-brand product, and recently – with discounters Aldi and Lidl snapping at its heels – it has come a full circle and started stocking Stockwell tea again.
And it’s marvellous value. Only 50p for a pack of 80 tea bags! How do they do it?!
No, seriously. How DO they manage to sell a product that’s plucked laboriously by hand, (on tea estates that have to house, feed, educate and provide healthcare for each worker’s entire family), that’s processed in vast factories, transported thousands of miles from India, Africa, Sri Lanka and other far flung countries (the pack doesn’t specify), packed in tea bags that are packed in boxes, that are transported to warehouses and thence to stores where people are paid to put them on shelves and sell them?
In May 2018 the average price of a kilo of tea from the Mombassa tea auction (one of the two main sources of the tea we drink – the other is the Kolkatta auction) was £1.82. So they paid about 36 pence for the 200g of tea that’s in the Stockwell box of 80 – leaving 14 pence for all the rest.
And to cover the profit margins of the tea producers, traders, transporters, packers, branders, advertisers, and retailers along the way.
And what about that 36 pence? Was that sufficient to adequately pay all those workers and look after their families? An endless stream of news articles, academic reports, trade union actions and NGO studies should tell you the answer to that. (It’s No, by the way).
In India, for example, workers are not even paid the national minimum wage. Their employers say they are hamstrung by the Plantation Labour Act regulations that compel them to support not just the workers, but also their families. This can mean that for a plantation with 1,000 workers, the tea company has to provide for, say, 6,000 people (counting children and elderly relatives). So they include these benefits in the wage calculation.
So maybe Tesco is taking the hit – sacrificing profit on a “loss-leader” to lure customers away from the siren call of the German discounters. But even if that’s the case, it leaves the entire supply chain impoverished. And with its new “strategic alliance” with French retail giant Carrefour, Tesco is promising even lower prices…
Can you blame them? Tesco topped Oxfam’s Supermarket Scorecard launched last month as part of its Behind the Barcodes campaign on public policies that protect workers’ and farmers’rights – but how long can it keep that up when it’s fighting pernicious price wars?
Sainsburys got into hot water last year for publicly moving from Fairtrade tea to its own “fairly traded” model (which campaigners criticised for disempowering growers) – but have you noticed that it’s much harder to find Fairtrade products in Tesco now too? At least its Stockwell tea is Rainforest Alliance certified…
It seems that the tea supply chain shackles and traps everyone in it in some way. From producers shackled by low prices and thousands of dependants, to retailers caught in a vicious, ‘race-to-the-bottom’ price war.
But someone, somewhere, must be making good money from the vast trade in the world’s second most popular drink after water.
And none are so shackled, so impoverished, so disempowered and so much in need of your support as the workers who picked the tea in your 0.006 pence tea bag.
What can you do? Well, for a start you can “use your consumer power” and contact your supermarket as Oxfam suggests. You can also do as Traidcraft suggests and ask the big British tea brands Who Picked My Tea?