Darjeeling tea growers are keeping their fingers crossed for increasing exports of the world-famous brew to Europe as protected geographical indication (PGI) for the commodity is in place from this year and under the new status European Union now has to sell ‘pure’ form of this tea.
Aiming to reap the benefits of the PGI tag to the fullest extent, Darjeeling Tea Association is planning to send a delegation to Germany soon in order to push the aromatic tea in European countries. Germany’s Hamburg is the main trading and distribution centre for teas in Europe.
In 2011, the European Commission had registered Darjeeling Tea as a PGI product, the first commodity from India to get such a tag. But some European blenders, who generally had been mixing any tea with Darjeeling variety and selling the mixed teas with the iconic ‘Darjeeling tea’ tag, were given a five-year transition period to shift to the new regulatory norm.
As the transition period for the EU blenders has ended, the brew grown only along the slopes of the hills in Darjeeling can be sold as ‘Darjeeling Tea’ in the EU countries from 2016.
“As GI is in place now, we are planning to push Darjeeling tea in Europe. It is a heritage brand. We are in talks with the Union commerce ministry and the Tea Board of India to take a delegation to Germany. We are planning to send the trade delegation in the next 2-3 months,” said SS Bagaria, chairman, Darjeeling Tea Association.
Germany and the UK have been the traditional markets for Darjeeling tea in Europe. India exports about 2 million kg of this premium brew to the European countries, half of the total overseas sales annually. Last year Darjeeling produced around 8.15 million kg of tea, down from 8.51 million kg in previous year.
Talking to FE, Bagaria said exports to EU countries were rising and on the back of the GI tag export volume of the tea was expected to witness a good jump this year.
According to him, the trade delegation in Germany would hold talks with German Tea Association to discuss measures needed to promote the armotic tea in more European countries. “Europe is a big market for us. So, a proper understanding is required to promote tea there,” he said, adding there was enough scope to promote the tea in countries such as France, the Netherlands, Switzerland and Sweden.
The Darjeeling Tea Association said although tea exports to Europe rose in 2015 compared to previous year, price realisation remained the same in euro terms and fell in rupee terms.
Indian tea industry leaders opined that sending a tea delegation to Europe to promote the world-famous brew would be a good and timely move when Darjeeling tea industry’s margins are getting squeezed on the back of rising costs of production and falling price realisation. Cheaper tea from Nepal is giving tough competition to Darjeeling tea in the overseas markets.
“Things are not very good for Darjeeling tea industry. Price realisation of tea has gone down by R90-100 per kg in the last four years. With falling price realisation, sustainability of tea gardens in Darjeeling is a concern now,” said AN Singh, former chairman, Indian Tea Association (ITA).
As per recent media reports, three estates of the Alchemist Group in the hills had dues worth over R5 crore and the trade union of tea estate workers threatened to launch an agitation if the issue was not resolved.
According to Singh, Goodricke MD and CEO, if profitability of the tea gardens in Darjeeling continues to be under pressure then reports like Alchemist are likely to come up more.
Two years back EU markets for the premium brew suffered as some trade barriers were created in Germany when some importers claimed nicotine and anthraquinone had been found in the samples of Darjeeling tea. Indian tea industry, however, observed that the trade barriers were ‘unnecessary’ as chemical residues such as anthraquinone and nicotine are natural occurrences.
“Things have been sorted out. Now, nicotine is below EU’s permissible limit. And tea growers have adopted more cleanliness measures to thwart anthraquinone contamination,” Bagaria stated.
According to Tea Research Association (TRA), the problem of unwanted chemical residues is not only with tea grown in Darjeeling but also with other teas worldwide. TRA scientists said work is on to find out how and when nicotine and anthraquinone contamination happens, and EU scientists are also engaged in this particular research.
Further, in European markets there was growing practice of blending cheaper Nepal tea with the Darjeeling variety and passing it as premium brew. Now, that sort of blending cannot happen any more.
“Buyers from Europe were sourcing tea from Nepal as it is a good replacement for Darjeeling tea. Now with the GI tag, it remains to be seen that whether demands for pure Darjeeling tea rises in EU. Things will be clear when the high valued first flush of the tea will come up in March,” CS Bedi, managing director of Rossell Tea, told FE.
“As a planter, I think GI tag is a good move. GI covers so many of the tea gardens in Darjeeling,” Bedi pointed out.
Singh said it would be clear after one year that whether the Darjeeling tea industry reaps benefits of the PGI tag in EU. Darjeeling Tea Association is, however, confident that overall exports would rise by at least 20% this calendar year.