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Cess on tea exports re-imposed

04 Apr 2021

  • Funds raised under Cess for black tea promotional campaign 

  Following the suspension of cess on tea exports amidst Covid-19 challenges last year, the levy was reimposed in January this year, fundamentally used for promotions under the main Ceylon black tea global promotional campaign, The Sunday Morning Business learns. Speaking to us, Sri Lanka Tea Board (SLTB) Chairman Jayampathy Molligoda stated that the tax imposed on tea exports, known as the Tea Promotion Levy, was re-implemented on 1 January 2021 after its six-month suspension in July 2020. “It was suspended during the surge of Covid-19 for six months. We gave the concession to exporters and tea industry players from 1 July to 31 December 2020. We re-introduced this tax with effect from 1 January 2021, which is called the ‘Tea Promotion Levy’,” Molligoda revealed. The Tea Promotion Levy charges of Rs. 3.50 per kilogramme of tea exports. Moreover, the collected levy is utilised to develop the tea industry, mainly in terms of promoting the tea industry, it was further revealed. In addition, the SLTB Chairman spoke of the resumption of the Ceylon black tea global promotional campaign which focuses on the marketing and promotional aspect of the tea industry. “The Ceylon black tea global promotional campaign is on. We have identified a minimum of 12 countries in which we are promoting Ceylon tea. At the moment, we are working on countries such as Russia and Ukraine under the promotional campaign,” Molligoda commented. The Tea Board also revealed that the promotional campaign consists of three pivotal pillars upon which unique selling propositions are based, with the first pillar involving the authenticity of Ceylon tea. “Our first unique selling proposition involves the authenticity of Ceylon tea. This means we demonstrate our sustainability, social wellbeing, and economic sustainability,” he added. It was also highlighted that economic sustainability primarily involves supporting economic growth in the long term whilst positively impacting the environmental, social, and cultural aspects of the community. Molligoda further highlighted that the other factor involves the development of the wellbeing of consumers and all other parties involved in the value chain and supply chain. On the other hand, the second pillar of the unique propositions involves the premium character of Ceylon tea. “Ceylon tea is set on higher prices such as $ 5, whereas Kenya tea is priced lower in the global auction. This is due to the unique characteristics of the (Ceylon) tea itself,” Molligoda explained. The third pillar is based upon many wellness or health factors. According to the Tea Board Chairman, black tea particularly consists of several chemicals and compounds which act as an immunity booster. “Ceylon black tea has a lot of wellness features. The chemical found in black tea acts as an immunity booster; this chemical is only found in black tea, and not green tea. This is also supported by scientific research and literature,” he commented. Another unique feature of Ceylon black tea involves it being orthodox tea. This refers to the traditional method of production, which also adds to why Ceylon black tea is sold as a premium product in the global market. Molligoda also revealed that while the global tea production stands at six billion kg, the majority of it involves green tea. He also mentioned that there is about 570 million kg of CTC black tea coming from kenya and an estimate of one billion kg from India. Moreover, it was highlighted that the Tea Board is taking a modern approach by using social media and other digital platforms to promote the country’s black tea. “Sri Lanka produces and exports orthodox black tea which is also higher-priced because of its unique propositions. Currently, there is a black tea promotion being carried out, using YouTube and videography, by creating advertisements that are around a minute and 30 seconds long and are in 12 different languages,” he added. Furthermore, it was noted that the Tea Board participates in various trade fairs such as the Dubai Trade Fair and that it aids Sri Lankan tea brands in terms of financial assistance, thereby contributing to the national brand of Ceylon tea. “We are using tea opinion leaders (TOL) like ambassadors in various countries such Russia and Japan as well as newcomers like China. China is a huge consumer and exporter, and promotes the production of green tea. Yet they love Ceylon tea because they produce green tea but not orthodox black tea,” Molligoda added. He further stated that this is an ongoing campaign where each month, different campaigns are initiated under the promotional campaign. “The Ceylon black tea global promotional campaign is designed and implemented in consultation with our stakeholders. On the Tea Board we have a tea promotion and marketing council that consists of private sector exporters, and there is also a ministry representative as well,” Molligoda explained.


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