15% rise in Darjeeling Tea prices in Europe

Darjeeling Tea has commanded 15% higher rates in Europe this year despite the financial downturn in Europe as quality up-gradation and marketing have boosted margins of the beverage that is widely regarded as the champagne of teas.

The industry now hopes to take another leap with plans to join hands with European Trade Commission (ETC) to launch a marketing and generic promotion campaign in EU next year for making a further penetration in the region. Nearly 60%-70 % of Darjeeling's total production of 9 million kg is exported, mainly to Germany, the UK and Japan.

"This year, the EU buyers have offered us 15% to 18% higher prices over 2011 because they are satisfied with the quality of our premium first and second flush teas. Demand has also gone up because of less adulteration," said Sanjay Bansal, chairman of Ambootia Group, a leading Darjeeling tea producer.

Though 9 million kg was produced in Darjeeling, nearly 40 million kg was available in the global market with Darjeeling branding. The tea industry, along with Tea Board, fought over the years to have a GI (geographical indication) mark for Darjeeling tea to protect its identity in the world market. Teas that were sold at around 12.75 euros per kg last year have been able to command 15 euros this year.

Some better qualities have garnered 30 euros per kg, said SS Bagaria, chairman of Darjeeling Tea Association . Even medium quality teas have been sold at 7-8 euros per kg compared to 5 euros previous year. Incidentally, the second flush teas have a unique muscatel flavor that lures the EU buyers. Moreover, this year's recession has seen big EU tea importers buy out small family-run companies who were into tea imports.

"This restructuring of business in their homeland has helped us push more teas because it is easier to make business with big buyers," said Bansal.

Even Harrods , the upmarket store in London , has picked up 10% more teas from Ambootia Group this year. "We are expecting that the price of Darjeeling teas will go up further in 2013. It's a boutique product and should not be treated as a commodity.

The producers should sit together to work out a strategy to make further penetration in world markets. Interestingly , even the US has now started importing Darjeeling tea," said Ashok Lohia, chairman of Chamong Tee Ltd, the largest Darjeeling tea producer in the country.

MGVK Bhanu, chairman of Tea Board of India, said: "We are working on a plan for generic promotion of Darjeeling tea with ETC. This will also involve marketing because we will try to create consumer awareness about Darjeeling tea. However, nothing has been finalized yet."

The local prices of Darjeeling tea have gone up substantially.

Source: Economic Times

KOLKATA: There's good news for the producers of Darjeeling tea, the champagne among tea varieties. The European Trade Council and the German Tea Association have agreed to confer the protected geographical indication (PGI) status on Darjeeling tea, the first commodity from India to get such a tag. This implies that the brew produced only in Darjeeling can be sold as Darjeeling tea in the European Union.

"As of now, blenders in EU countries generally mix 49% of any tea with 51% of Darjeeling tea and still sell it as Darjeeling tea. But it has now been decided that only those packets that contain 100% Darjeeling tea can be sold as Darjeeling tea," Tea Board chairman MGVK Bhanu told ET from Germany. The packets will also have the Darjeeling logo and PGI logo labelled on them.

Darjeeling was granted the geographical indication status by the European Union in October last year, authenticating its origin. However, the implementation of this status involves a phasing-out period within which products which do not conform to the law and are not authentic from the hill district of Bengal will be driven out of the market.

It has also been decided that the European Trade Council and the Darjeeling Tea Association along with the Tea Board will jointly promote Darjeeling tea in the European market.

According to the EU notification, the blenders in Europe have been handed out a caveat in the sense that only those who had products in the market five years before October 14, 2009, can continue selling their blended products as Darjeeling tea for the next five years. "There is hardly any Darjeeling tea left with the European buyers. Henceforth, only Darjeeling tea will be available in Europe," said SS Bagaria, chairman, Darjeeling Tea Association.

Industry officials estimate that around 40 million kg of tea gets sold as Darjeeling tea across the globe every year. In this context, the EU's decision is considered important. The process of granting a geographic indicator, which means that only the produce of a particular area can be sold by its generic name, started with India according the GI status to Darjeeling tea in 2003.

Since, it was mandatory to get home protection, the Indian government passed a Geographic Indicator and Protection Act in 1999 after which Darjeeling tea was given the GI status in 2003. The granting of GI status in the home country - India in the case of Darjeeling tea - is only the first step towards the protection of the commodity's generic brand.

In 2007, the Tea Board of India and the Darjeeling Tea Association invoked a provision in the EU Commission Regulation 5001 to ask Brussels to accord the PGI status to Darjeeling Tea.

"We have also made an application before the Japanese Property Right Organisation for granting of the Production of Regional Origin (PRO) in Japan and also before the Trade Administration Authority (TAA) of USA for granting of Community Collection Mark in the USA," said Sanjay Bansal, chairman of Ambootia Group. He added that PRO and TAA were similar to the PGI tag.

Source: IndiaTimes