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?
Great blog, thanks Sabita. Readers might be interested in Traidcraft Exchange’s recent research on tea from Assam, and campaign for transparency by the big UK tea brands
Thank you, Mary. I would certainly encourage everyone to read Traidcraft’s report and take the action.
I’m a planter myself based in Assam
I approve your write up and will circulate the link as much.
Request you to pull up the price issue else this industry is now under slow poison death.
Thank you, Harsh. The industry is certainly facing many challenges and low prices make it so much harder to meet them.
Couldn’t have been better portrayed the predicament of tea producers
Very true sabita I am a planter from Assam I feel the same
I would be interested to know what would be a reasonable price for a kilo of tea that would enable planters to pay the minimum wage, maintain workers’ accommodation, provide quality healthcare and education and protect the environment… any ideas anyone?
“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.” This statement is incorrect and claims like this will
jeopardize worker’s movement.
Thank you for picking up on this, Jayshree. To clarify my point, the Plantation Labour Act requires plantation owners to provide workers and their families with housing, education, healthcare and a number of other benefits free of charge, that are normally provided by the government or by independent providers. According to the Government of Assam the average family size in Assam is 5.5 (my estimate was a little out). So the price growers receive for their tea must also cover this. This requirement not only increases workers’ dependence on their employers, but employers say it places an extra financial burden on them and that it should count towards the workers’ wage calculations. However, according to the Minimum Wage Act of 1948 statutory benefits such as housing and medical care, should not be counted in minimum wage calculations. Further, as a number of reports have shown, where these benefits are provided (and sometimes they are not) they are often either not of adequate quality, or are charged for.