Falling tea prices affect working conditions
SOMO research exposes poor working conditions in six leading tea producing countries
12-06-2008
Working conditions of tea pickers worldwide are under pressure due to low prices and high production costs. This is one of the conclusions of the new SOMO report “Sustainability Issues in the Tea Sector” presented today. While recently soaring world market food prices provoke wider discussions and present big problems for poor people in developing countries, it turns out that in real terms world market prices for tea are still much lower than they were in the 1980s . The SOMO report provides a unique comparative analysis of social, economic and ecological conditions in the worldwide tea sector. It shows that tea trade and distribution is dominated by a few international companies that benefit from stable retail prices and up till now have been unsuccessful in addressing many of the tea sector’s problems.
The new SOMO report analyses the conditions in six of the most
important tea producing countries: India, Sri Lanka, Vietnam,
Indonesia, Kenya and Malawi. It shows that, as a result of oversupply
leading to low market prices, for example, and high production costs,
working conditions for tea pickers are under pressure. The constituents
of this group, that represents the majority of the workforce, often
have low job security and low income security, low wages, face
discrimination along ethnic and gender lines and lack protective gear
as well as adequate basic facilities such as proper housing, sometimes
even drinking water and food. At the same time they have no way to
improve working conditions because independent trade unions are
ineffective, absent or not representing them because most of them are
temporary workers. While tea production by smallholders is rising
worldwide, their situation is often problematic because the prices they
are paid for fresh tea leaves tend to be below the cost of production,
among other factors. The sector's environmental footprint is
considerable, with reduced biodiversity as the result of habitat
conversion, high energy consumption (mainly using logged timber) and a
high application of pesticides in some countries.
Meanwhile, tea trade and distribution is dominated by a few
international companies, such as Unilever (Lipton, PG Tips), Tata Tea
(Tetley) and Sara Lee (Pickwick), that benefit from stable retail
prices and, together with retailers, capture more than three quarters
of the (Dutch) retail price. It was found that these tea companies are
increasingly looking to address the problematic conditions in their
supply chains through Corporate Social Responsibility (CSR). However,
to date these strategies have not succeeded in adequately tackling many
of these problems. With this comparative analysis of conditions,
obstacles and opportunities in the tea industry and by making
recommendations SOMO aims to contribute to a more sustainable tea
sector.












