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Monday, April 19, 1999

Darjeeling tea firms to form consortium 

Nandini Goswami  
CALCUTTA: Tea majors including Goodricke Group, Warren Tea, Duncans, Magors with interests in Darjeeling are planning the formation of a consortium much in the lines of India Project Blend Ltd (IPBL), a company which exports Indian tea to Russia.

The company being mooted by the Darjeeling growers is slated to address sagging sales of the rains tea in the domestic market.

The contemplation of a national branding process for the `muscatel-flavoured' teas will help to raise the untapped potential in the Indian market, feel industry analysts.

Says K David, managing director of Goodricke Tea," While protection and promotional moves have been attempted and a modest beginning has been made by the industry, marketing is yet to hammer its way through. To sought this out, we have given a serious thought to the entire process of setting up a company with a chief executive at its helm to look into the aspect of marketing Darjeelings in the domestic market.

According to David, it is commonly perceived thatDarjeelings are expensive teas and has thus put this category out of the reach of common consumers. The disposal of 50 per cent of the Darjeeling teas is becoming increasingly difficult.

To this end, the growers are in the process of identifying a market research group to assess the demand for Darjeeling tea in the Indian market.

Explained David, that producers reap maximum margins on back-end winter and the second flush variety, which has a lucrative foreign market as well as a good domestic market, where blenders pay a high price.

The main problem revolves in disposing off the rains or the post second flush teas (plucked after June) which do not find an export market and have a restricted clientele.

As a result most producers are bound to sell this crop at prices lower that its cost price.

"The rains tea sell at prices below their cost of production which is pegged at Rs 120-150. The prices that these teas fetch is just about Rs 65-70 per kg."

" The lack of domestic support means that that acountry producing over 800 million kilograms of tea is unable to consume even 5 million kg of Darjeelings", added David.

Industry observers contend that Indian consumers are willing to pay a price for quality Darjeeling teas and hence its promotion in the Indian market is significant.

As part of its strategy towards enhanced promotion of Darjeeling teas, the industry has been harping on quality specifics -- the manufacture of an increasing amount of leaf grades is one such proposition being talked about on demand and restricted clientele.

The uniformity in grade size would have long term benefits in the sale and marketing of Darjeeling teas, industry analysts have to say.

Meanwhile, on the promotion front and in the wake of increasing duplication of teas in the world markets (it is assumed that 40 million kg is sold worldwide, whereas only 10mkg is produced in the Darjeeling hills) the industry has called for a necessary certification in the form of trademark. The whole idea behind patenting is tocreate an independent brand equity in terms of Darjeeling in combination with the logo.

For a necessary certification, Darjeeling teas in India and abroad has been defined particularly with respect to its agro-climatic condition together with the type of plant as well.

Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.


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