Last updated: January 2014
Why We're Still Not Paying Tea Workers Enough
Poor wages and conditions for tea workers remain the stand-out problem for tea. In response to concerns about declining living standards, a range of ethical initiatives are working to make the tea industry more equitable. But Oxfam reveals that even Fairtrade standards have not managed to fully address the problem of a living wage.
A majority of the bigger brands now buy their tea from Rainforest Alliance sources. We look at how that certification compares to Fairtrade. Plus, we look at life on a Fairtrade tea estate and then life on some Rainforest Alliance ones.
We examine the environmental impact of tea. Monoculture plantations decrease biodiversity and increase the need for pesticides whilst processing tea requires a lot of energy. We explain how the way you make a cup of tea can affect its carbon footprint.
The global tea industry
Although global prices for tea are at historically high levels, in real terms (accounting for inflation) the prices paid to producers are barely level with, or are even below, where they were 30 years ago. Tea farmers and tea workers are the most vulnerable in the tea supply chain, having very little bargaining power in a market littered with middlemen and dominated by a few big companies.
According to UK charity War on Want, the structure of the global supply chain means that the lion’s share of profits is captured by these big companies.
Tea is usually exported after primary processing (drying and bulk packaging). This means that blending, final packaging and marketing – which are the most lucrative stages in the overall process – are mainly carried out by the tea brands in the buyer countries.
The buying side of the tea supply chain is very concentrated, which gives the companies involved a high level of power over the prices paid to producers. Just four corporations dominate the global tea trade: Unilever (which produces Lipton and PG Tips), Tata Tea (which produces Tetley), Van Rees (a tea trading company) and James Finlay (a tea packing company).
In the UK, the retail market is similarly concentrated, with the top four companies controlling 74% of the retail market by value: Tetley (Tata), PG Tips (Unilever), Twinings (Associated British Foods) and Yorkshire Tea (Taylors of Harrogate). PG Tips and Tetley alone account for around half of the tea sold.
As tea passes through the tea brands and retailers, (the final two stages of its journey to the consumer), they capture a massive 86% of the value added, compared to 7% for the producing country.
Very little of the profits included in the retail price of a box of tea goes to the tea-producing country. Instead, whilst multinational corporations reap large rewards, tea workers are condemned to a life of penury. A tea picker makes just 1p for each £1.60 box of tea bags sold in a British supermarket.
Supermarket own brands
Supermarket own-brands account for only 20% of the market so we have not included them in this guide. See our guide to the seven major Supermarkets.
All Co-op’s own brand tea has been Fairtrade since 2008 and Marks & Spencer’s from 2006. They both also sell own-brand tea that is both Fairtrade and organic.