Discount culture hurts Sri Lanka’s top tea brand
View(s):Dilmah, Sri Lanka’s and the world’s top single origin Ceylon Tea, has been seriously affected by what it calls the “discount culture”.
“Thirty years ago Dilmah was launched as a single origin pure Ceylon tea, grown and packed in Sri Lanka. Today, it is the same tea in every respect. In several territories including Australia and Europe, we are now forced to sustain huge losses as retailers do not entertain any price revision to their buying prices, whilst their own margin keeps improving all the time. Traders, large and small are the cause of poverty in the world. If they pay a fair price to farmers for their hard work in producing the cup of tea, coffee or chocolate, poverty will become history,” noted Dilmah Chairman Merrill J. Fernando in the company’s 2017-18 annual report released this week.
He said retailers globally are relying on heavy discounts to increase sales. Big trading brands revel in this discount culture as price cutting is funded by “compromising the quality of products even though that happens at the expense of taste, wellness and the producer”.
The result, he points out, is a poor product which most consumers would not touch, if they knew the truth about what they eat and drink today. Some years ago, all branded products around the world had to declare the origin of their contents by law. This was the customers’ only guide to quality of their brands. Now they sell tea – just tea – that comes from anywhere as long as it is the cheapest. The brand names however remain the same. Customers are made to pay for old brand names, not quality, he said.
On fair trade, he said Fair Trade is strictly a marketing strategy aimed at gaining the sympathy and support of consumers without addressing the causes of unfair trade. “Fair Trade provides enhanced profits to retailers, importers, and everyone in the supply chain except farmers, the most deserving segment of the industry. Fair Trade must start with the farmer, by assuring producers of a fair price for their hard work and dedication in producing your cup of tea,” he said.