Tea prices sore as world production
falters
It
emerged yesterday that tea prices have risen again for the third consecutive
quarter. Tea production organisation TPEC (Tea Producing and Exporting
Countries), the body which manages tea output from the T8, eight of the
largest tea producing countries, announced that it was again cutting supply
amid fears of global economic slowdown in the hot drinks sector. The action
follows a similar decisions made days earlier in both coffee and hot
chocolate markets. It was announced by Franz Zickler, vice president of
TPEC, that output would be cut by 2.3% to 83
million barrels of tea per day (approximately 280 million
standard pots of tea).
Left: TPEC Headquarters: shaped like a giant teapot
The move was said to be motivated by a general downturn in economic
conditions, which has resulted in a global fall in the demand for tea bags.
The demand for loose tea has similarly been affected. Dr Zickler, speaking
at a press conference at TPEC headquarters in
Calcutta, India, said “This [cutting output] is a direct result
of economic influencers which are impacting on our industry.”
Responding to an accusation that the move may have been motivated by
pressure from large tea producing corporations to reduce output in order to
artificially increase prices, Mr Zickler, former CEO at PG Tips, said “[the
accusation] …is totally false. It is in no way an attempt to artificially
increase prices to benefit the interests of PG Tips”. He added, rather
hastily, “Or anyone else for that matter!”
Sandra Bywater, spokeswoman for hot drinks consumer
watchdog BrewCom responded angrily amid reports that leading UK
supermarket Sainsbury’s has announced it is to increase the price of its Red
Label Tea by 7 pence as a direct result of the TPEC move. Ms. Bywater
suggested the price rise was “completely unacceptable and against the public
interest”. Other supermarket chains are expected to announce similar price
rises for tea-related products in the coming days. An official for the
Department of Trade and Industry (DTI) was quoted in several national
newspapers as saying that the price rise was “…not good for the economy”
News of the cut in output has alarmed economic analysts as historically a
slowdown in the hot drinks market has often served as a precursor to a more
wide ranging depression. Tea’s Up’s dubious economics “expert” Michael Court
explains that “As the price of tea rises as a result of the initial strong
demand, we see an inflation-caused spiralling effect which reduces demand,
and if this is in conjunction with inflation in other sectors (as has been
seen), the downturn can only be exacerbated by the fall in tea demand, onset
due to the reduction in demand for complimentary
tea related goods such as cakes, biscuits, and china tea mugs. In
addition to this, with less tea in offices, productivity and morale falls”
The news was met with despair in many quarters. Speaking to s’Up’s Angela
Frankenberg, office worker Gary Jeremies, 27, said “In my office, we have to
pay 11p for a cup of machine tea. It tastes nasty
as it is without the bitter taste of the inevitable 1 or 2p increase in the
prices”. It is forecast by the DTI that machine tea prices shall
rise by an average of 1.3p year on year, compared with previous years of
relative price stability.
Fears raised by certain experts that the onset of price rises within the tea
sector (and the hot drinks sector in general) would lead to street riots
have, so far, been unfounded. A police spokesman we reached for comment
indicated branded the suggested tea-related violence was “tabloid hysteria,”
although he expressed reservations about the police’s ability to cope with
crime as the machine tea price rises in the station may “price junior
officers out of the market”.