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A fair cuptowards better tea buying

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Agnes Onyango* works in a medium sized tea armnot ar outside the Kenyan capital, Nairobi. She isrom a province in the ar west o Kenya, close toLake Victoria.

Agnes is a casual worker. Every two months we arefred or two weeks, then we are hired again by thesame person. The arm provides her with housingeven when she is in between jobs.

The pay she says, is not good, its Ksh. 4.83 (4pence) per kilo. I have been here a year and thepay has not gone up. But on other arms, they getKsh. 6. I came here rom another arm. The ownerheard we wanted to join a union. He sacked all ous. He brought about fve lorries o soldiers whosurrounded us and asked us to vacate the houses.So we let. They didnt even pay us our dues, sheremembers.

She has not heard about Kenyas minimum wage.

John Masinde* travelled rom western Kenya toclose to Nairobi to look or riziki (sustenance)because ater completing primary school there wasno more money. He has been working mainly onthis arm, as a casual employee, or our years.

Like many in his industry he works six days a weekrom 6am. The only days I dont come are when Imsick. Time o is a real problem because it translates

to ewer kilos picked, which means less pay. As heputs it, your strength determines your pay. Heis paid Ksh 4.83 (4 pence) per kg o green tea leapicked and when production is high can pick over100 kgs per day.

This is however countered by the dry seasons.Then you pick as little as 9 kgs.

John eels consumers o tea should try paying a goodprice so that workers are paid enough. Maybe theyare paying a good price but we dont know becausethey are ar. We are still oppressed. Thats not a

good place to be, he observes. But i they buy at alow price our condition will just get worse. Lie willbecome as hard as a rock. That is all.

On a good day Agnes and John earn between Ksh.386 (2.87) and Ksh. 579 (4.27)). In the low season which can be three and a half months of the year it could be as little as Ksh. 43 (32 pence).

An average family needs around 100 Ksh. (73p)per day purely for food. On top of this, there is thecost of cooking fuel, soap, clothing, school books,medical fees, and other essentials.

Tea workers - in their own words

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Tea plucker/worker

Small farmer Plantation/Estate

Factory

Collector

Buying centre Factory workers

Brokers/auction(70% of the worlds tea)

Tea company

Buying agent

Consumers

Restaurants, schools,hospitals and work places Retailer

Direct sale

(30% o theworlds tea)

Tea supply chain

Producingc

ountry

Consum

ing

co

untry

Food service/catering company

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Page 4 A fair cup: towards better tea buying

Workers Tea plantations and small tea armers employ thousands o workers to helppluck tea, prune and maintain the tea bushes, as well as apply ertilisers orpesticides as necessary. Workers oten have to work in difcult weather

(extreme temperatures and heavy rain) because any delays will aect teaquality. The quality o tea plucking is a critical actor in determining the fnalquality o the tea. Large tea plantations are oten in isolated places andworkers are very dependent on the inrastructure (such as schools or medicalacilities) provided by the company.

Producers Tea is produced by either small armers on their own land or on largeplantations sometimes owned by tea companies. In some instances collectorsemployed by the actory collect the tea leaves rom the armers, and in othersthe armers deliver directly to buying centres or actories.

Factories Process green tea leaves into green or black tea o dierent grades within hourso picking. Some actories are independent, some are owned by a tea company

and some are owned by the armers. Factories employ signifcant numbers oworkers on varying shit patterns.

Brokers Sell tea at auction on behal o the actories.

Buying agents Many o the larger tea companies have their own buyers based in the major teabuying centres o the world or they employ trading companies to makepurchases on their behal. These agents and buyers have instructions as to whatquality and quantity o tea is required, and when, and are given maximumprices they are authorised to pay or particular grades o tea.

Tea companies These companies manage the buying, storage, transport, blending and packingo their own or supermarket own-label teas.

Retailers In the UK tea is mainly sold by supermarkets and convenience stores who maysell their own-label teas, as well as the major brands rom the tea companies.

Food service Buy tea largely rom the tea companies or sale to canteens, cas , hospitalscompanies and schools.and caterers

Consumers Drink tea at home bought rom a retail outlet as well as out o home - orexample at work, in cas or restaurants.

Governments in Can shape the tea market in their countries through a range o policiestea producing includingVAT on inputs, taris, investment policies, auction regulations andcountries national labourstandards.

Governments in Can shape the tea market through taxes or other restrictions on imports,tea consuming regulatorystandards, competition policies as well as by holding companiescountries accountable or theirpractices and impacts overseas.

Investors Can influence the practice o major UK companies, especially the large retailersand ood service companies.

Whos who where are you?

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Fast tea facts

Major producers. Tea is a tropical product and is producedin some of the worlds poorer countries. The majorproducers are China, India, Kenya and Sri Lanka whichtogether account for almost three quarters of globalproduction.3

Creating jobs and incomes. In India the tea industry is thesecond largest employer with just over one millionpermanent workers and a further three million dependenton the industry. Kenya is the worlds largest exporter andtea contributes 17 per cent of the countrys export earningsand employs 10 per cent of the population.4

Top tea drinkers. The UK is the third largest tea importerglobally and has the third highest consumption per head.5

Rising production. Globally tea production is rising slightlyfaster than consumption creating a situation of oversupply.The producer price of tea has plummeted by nearly 40 percent in real terms since 1980.6

Stable prices. The retail price of tea in the UK hasremained fairly constant in real terms over the past tenyears. Prices range from as little as 0.30 to 3 for a box ofeighty tea bags.

All about tea

Tea is the most widely consumed beverage in the world afterwater. Behind each cup of tea is a complex supply chain bringing

together some of the worlds most powerful companies with someof its most vulnerable farmers1. And all is not well. Tea farmersand their workers are often in a very weak position in relation toothers in the tea industry and reap the lowest rewards. This canmean pitifully low and often erratic levels of pay.

Buyers who work for tea companies or retailers are key actorswithin the supply chain. More responsible purchasing practicescan make a huge difference to the livelihoods of farmers and theirworkers. Conversely, poor purchasing practices may underminethe very stability and efficiency of the suppliers businesses onwhich buyers depend. At the heart of the debate is the questionof balancing risks, responsibilities, and benefits between thedifferent parts of the supply chain.

This report will outline how the decisions of those who purchasetea in the UK to sell or serve to the UK public can better recognisethe critical contribution made by tea farmers and workers whiledelivering good quality, traceable tea which consumers can trust.2 Average annual auction prices

1996 - 20057

World production and apparent

consumption of tea 1987-20068

2000

2500

3000

3500

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Production

Apparent

Consumption

Thousand metric tons

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

0

50

100

150

200

250

North India

Sri Lanka

Kenya

IndonesiaSouth IndiaMalawi

Average

US Dollar Cents

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Tea company buyer trends and dilemmas

There are a number of trends in the UK tea market which are posing new challenges for tea company buyers.

Tea trends Buyers challenge

Declining marketUK tea consumption is declining with consumerspreferring soft drinks or bottled water. The value of teasales in the UK declined by 12% between 1999 and 2004.9

The competition between tea companies is increasing.

Growth in speciality teaSpeciality teas (such as single estate) are booming, witha 50% rise between 2002 and 2004. Fair Trade teascontinue to grow rapidly in both the in and out of homemarkets. According to Euromonitor, novel, speciality andpremium products are the bright young things of theUK hot drinks market, stealing the limelight from thestalwarts.10

There is a need to ensure greater product differentiation,to work towards improved traceability and to raisequality.

Price pressures led by own-labelSupermarket own-label teas have grown rapidly and areoften on the shelf at low prices. Supermarket power isgrowing rapidly as they consolidate, giving each a largermarket share.

Tea companies are under pressure to cut costs - oneobvious way is by securing the cheapest possible sourceof tea supply.

Standards and traceabilityNew and increasingly stringent standards apply to tea including HACCP (hazard control system), ISO 22000 (newFood Safety Management System) and the EuropeanUnions new pesticide residue levels. At the same timethere is a trend towards standards that encompass socialconcerns, including the Ethical Tea Partnership and FairTrade.

New standards put pressure on tea company buyers toensure a greater level of traceability, right down thesupply chain.

In a competitive field, buyers for UK teacompanies and for the supermarket own-labelshave to be able to get tea onto supermarketshelves at a competitive price while ensuringthe quality and the unique taste of their brand.In order to marry these objectives they sourcedifferent teas from around the world to get theright appearance and taste at the right price.Often this will mean as many as 30 different teasfrom several countries are blended together in asingle tea bag.

Up to 50% Kenya(brings a bright,golden colour)

Up to 25% Assam(brings a maltyflavour)

Up to 25% Ceylon(brings a flowery tasteand citrus tang)

The UKs favourite brew

Ninety-six per cent of tea in the UK is bought as tea bags and 165 million cups of tea are drunkeach day.11

Across Europe over one fifth of all hot beverages are consumed out of home particularly inthe workplace.12

Five companies dominate the UK market. Tetleys (27%), Unilever Best Foods which hasPG Tips brand (25%), Apeejay Group (Typhoo), Bettys and Taylors of Harrogate (Yorkshire Tea)and Associated British Foods (Twinings and Jacksons of Piccadilly).13

In 2006, just four large grocery retailers (Tesco, ASDA, Sainsburys and Morrisons) accounted fornearly three-quarters of all grocery sales.14

Components of a Typical English Breakfast Tea Bag. Each countrys tea is often substituted for cheaper alternatives

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Shared responsibilities the role of retail and out of home buyers

Buyers who work for the supermarkets, other retail

outlets (such as convenience stores) or for foodservice companies supplying the out of homemarket have to consider:

Keeping prices competitive and matchingpromotions of other retailers

Providing a range of products to respond tocustomer demand

Ensuring maximum product availability

Supporting innovation and growth of newproducts in their category to help differentiatethemselves.

Some supermarket buyers may also have to balancethe need to give their customers choice with thepressure to promote own-label products.

Because the tea market is declining it is increasinglydifficult for tea retail buyers to achieve growth fromtheir section. There are a number of techniquesthat they can try, but each of these has knock-oneffects further down the supply chain which may beat odds with the companys efforts to source moreresponsibly. This can create a worrying disconnect

between company policy and buyer behaviour.

Price promotions are common in tea. Usually these

are set out in advance so tea companies are able toplan for them. But because the tea company oftenhas to pay the cost of the price cut, there is a driveto pass these costs further down the supply chainon to the factory and farmer. Similarly in a decliningmarket the increasing price pressures - in part led byown-label - may be directly felt by the tea factoriesat the end of the supply chain.

The lack of security of tenure that tea companieshave with many retailers is particularly problematic.If a supermarket buyer needs to cut costs they may

put the whole of their tea range, or a sub-sectorwithin it, out to tender. This process is sometimes runthrough e-auctions. Bids are often live which drivesthe price down and the lack of face to face contactmakes discussion of issues other than price difficult.This practice can make tea companies vulnerable, asat short notice they could lose their business with abig institution or retailer. Given the concentrationin the supermarket sector this could mean largeand sudden losses for the tea company. In turn thisprovides a disincentive for tea companies to buildlonger-term relationships with their suppliers.

Consumer gets cheapbut mediocre tea posing

possible health andreputation risk for tea

company and retailer. Teaconsumption declines. Retailer demands

low prices, frequentpromotions and offersno security of tenure.

Tea company forcedto cut costs and has nosecurity to plan or buildrelationships - instructsagent to buy fromcheapest source.

Buyer has norelationship withtea factory.

Factory as price taker.No idea where tea

goes, the price it makesor where next ordercoming from. Has to

cut costs.

Risk and costspassed on to farmers.

No bargainingpower with factory.

Low wages and

very poor workingconditions and

standards of living.

Consumer gets goodquality tea from a

source they can trust.Tea consumption

increases.

Retailers support theirsuppliers through acontract specifyinga notice period. Paysustainable price.

Tea company willingto pay a good pricein return for a highquality product.Instructs agent tobuy from knownsource.

Buyer builds relationshipwith certain suppliers toensure a quality productand traceability.

Factory has theinformation necessary

to improve theirquality and negotiate a

reasonable pricewith buyer.

Risk shared,farmers have good

understanding of thetea trade, enjoy decent

living conditions andare productive.

Disabling supply chain Enabling supply chain

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Despite their importance in determining the qualityof tea, farmers are the most vulnerable in the supplychain. Pressures originating higher up are pusheddown, translating into increased risk, higher costsand lower returns for farmers.

The implications of this are serious as most teaproducing regions in the world are poor, so farmersand workers do not have the social security support

to protect them against such shocks and risks. InKenya more than 52% of the population live belowthe poverty line and life expectancy is just 47.5 years.In India nearly half of all children under five aremalnourished.15

This table identifies key areas where buyers affectthe tea factories position and in turn that of thefarmers, their workers and their dependents.

Farmers/factories in the best position Farmers/factories in the worst position

Farmer relationship with factoryFarmers either own, manage or are sufficiently wellorganised to be able to negotiate effectively with

factory management.

Farmers and their workers are price takers - theyare kept waiting at buying centres, there are

delays in collection and the resulting costs notcompensated. There is limited support or extensionfrom the factory. Middlemen/collectors (sometimescalled leaf agents) take a large slice of the factoryprice.

Relationship with buyersFactories know who their principal buyers are andwhat quality and quantity of produce is required,whether the sale is made directly or through anauction. There is an established relationship withbuyers which enables factories to plan ahead and

invest.

Factories sell their tea through brokers ormiddlemen at auction. They have no idea whobuys it, where it goes next or the price it makes.Factories with cash flow problems make directdistress sales of tea at very low prices.

Support from buyersFactories are provided with market informationby their buyers, and are helped to make businessimprovements - whether to the quality of their teaor through social programmes such as improvedwater supplies or better safety equipment.

No support from buyers at all as no relationshipexists. Farmers do not understand why the pricesthey are offered vary so widely, and are notsupported to improve quality.

Price mattersWhether selling through auction or through directsales, the factory receives a sustainable price inreturn for a consistent supply of good quality tea.This ensures a living wage to pluckers and factoryworkers which can provide decent health care andschooling for children. It also covers the costs ofmeeting quality and traceability standards and ofmaking other business improvements.

Receive prices below what is needed to survive.This can translate directly into unsafe workingconditions such as long hours or inadequateprotective equipment. In the worst scenario thismeans that pluckers and workers have limitedmedical care, are unable to provide education fortheir children or eat a sufficient diet.

Helpful standardsStandards are jointly agreed between buyersand factories/farmers. The standards are locallyappropriate and relate to issues that farmers findimportant. The farmers and factories investment

in meeting standards is recognised in the pricepaid.

Standards are imposed from the outside focusingon protecting the buyers reputation, rather thanon issues that matter to farmers and workers.Factories have to comply with a multiplicity

of confusing, competing and time-consumingstandards which add cost and threaten theirbusinesses viability without the guarantee of sales.

Impact on lives

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Newton Nyambane* has worked as a casual teaplucker on a large estate in Kenyas Rift Valley foreight years. I am housed though I am temporary.I work 6 days a week for 8 hours a day starting at6am. We are paid Ksh. 6.34 (5 pence) per kilo picked.I earn all my income here. I am a union member.I have heard of the minimum wage and I saveKsh.700 (5.20) every month.

Despite higher wages than non-unionised workers,Newton feels that most of the profit is made by theowner of the farm. When the bosses say prices arebad at Mombasa (tea auction), pay becomes bad.

But when the grade (tea quality) is good, the pricecannot go above what was agreed. Newton eatsonly one main meal a day and is only able to affordto eat meat twice a month.

On his free Sunday, Newton likes taking his childrenfor bird walks in a nearby forest. I pray God helpsme to work and save so if they pass primary, I canpay for secondary (school). If I hear my children wantto become tea pickers, its like pain entering myhead. I have struggled in this job for a while. I wouldprefer them to be mechanics, or join the army.

Dreaming of a better future

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Tea company/own-label buyers Retail/out ofhome buyers

Benefit tobuyer

Benefit tofactory andfarmer

1. Develop a relationship with your supplierWhether buying tea directly or through the auction system,it is important to develop a relationship with the individualfactories you buy from. As well as helping with traceability,once you know who your suppliers are you are in a betterposition to understand their problems and work together

towards improvements.

It is importantto develop anunderstandingof the tea supplychain and howyour decisions or

those of the teacompanies youdeal with impacton farmers andworkers.

Improvestraceability

Facilitatesqualityimprovements

Avoidsreputationalproblems

Builds trust andcommitment

Improvestransparencyand clarity

about exactlywhat product isrequired

2. Be clear about the terms and length of the relationshipDevelop a contract or memorandum of understanding withthe factories you buy from specifying the length of therelationship or notice period required for termination of therelationship. This facilitates trust, loyalty and makes it easierto make positive long term investments.

Agree a contractwith the teacompaniesyou buy fromspecifying thenotice period.This will givesome securityof tenure to thecompanies andenable themto invest inbuilding positiverelationshipswith theirsuppliers.

Facilitatestrust andloyalty

Improvementsin consistencyof quality andsupply

Allows longer-term planningand investment

Enablesinvestmentin socialimprovements

3. Work togetherTea factories, tea farmers and their workers are importantpartners in delivering a quality tea product. The more youcan work together the better. You could develop specific

programmes that: support business or management improvements at the

factory

help improve tea quality, for example through improvedagricultural extension work

support improved working conditions for farmers andfactory workers

provide market information or training to enable factoriesand farmers to understand the supply chain

provide clear communications about pricing decisions.

help factories to add value to their tea through localblending and packing operations.

Developing amore securerelationship withtea companies

and paying areasonable pricecan enable thosecompanies todevelop moresupportive waysof working withtheir partnersfurther downthe supply chain.

Facilitatesquality,businessand social

improvementsReducesthe risk ofsupply chaindisruptions

Avoidspotentialreputationalproblems

Helps farmersimprove qualityand achieve ahigher price for

their teaLeads to betterrun, moreefficient factories

Improvesworkingconditions fortea pluckers andfactory workers

The following recommendations seek to identifyways to improve purchasing practices to meetthe ultimate goal of ensuring that good workingconditions and basic human rights are respected

Recommendations

throughout the supply chain. This is a discussiondocument and we would welcome comments onthe following recommendations to tea company,own-label, retail and out of home buyers.

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Tea company/own-label buyers Retail/out ofhome buyers

Benefit tobuyer

Benefit tofactory andfarmer

4. Pay a sustainable price for your teaPaying a sustainable price reinforces positive trends andallows for real social improvements for farmers and their

workers. At the moment some company buyers simplyinstruct their agents to get the range of teas needed in theirblend at the lowest price but this may mean prices andtherefore wages below the cost of living. This causes socialhardships as well as posing reputational risks.

Instead, together with your chosen tea factories:

Work out what would be a minimum sustainableprice to ensure that the factory meets its costs ofproduction, has sufficient capital for investmentand can ensure that farmers receive a living wage

Instruct your agent to honour this price in direct contractsor to top up auction price as required.

Consider theimpacts of yourprice demands

(as well asdemands forpromotions,loyaltypayments etc)on actors furtherdown the supplychain.

Qualityimprovements

Reputationaladvantage

Improves productquality, socialstandards,

managementand businessperformance

Leads to moresustainablelivelihoods forworkers, farmersand their families

Standards which help rather than hinderTea producers already receive the lowest share of benefits inthe supply chain. In a declining tea market, standards whichplace significant additional cost on factories and tea farmersmay serve to undermine - rather than support - the typeof improvements that the standards are designed to bringabout. As a buyer there are a number of issues related tostandards you should consider:

Ensure that the investment made by suppliers in complyingwith your standards is reflected in the price you pay -particularly if you are asking them to make majorinvestments of capital

Assess the impact of your standards. Are they designed tobenefit farmers and their workers by addressing real needs

or are they designed purely to avoid reputational risk? If you are insisting on social standards, develop and review

these in consultation with your suppliers. This will ensurethey address issues that are important to them and do notinadvertently disadvantage smaller growers. By workingwith local actors (such as NGOs or trade unions) you candevelop verification methods which are appropriate to localneeds

Consider working with other companies to rationalise thenumber of standards required moving towards bestpractice and those most locally relevant

Under pressure to cut costs or source sufficient quantities,buyers sometimes buy from outside the standards they

require. This sabotages the whole relationship,undermining trust and confidence, leading to mistrust ofstandards or a temptation to fake compliance. Insteadwork to maintain and improve the integrity of yourstandards.

If your companyhas guidelinesaroundresponsiblesourcing, makesure these aretranslatedinto the waybuyers actuallypurchase fromtea companies.

As a retailer orout of home

buyer make sureyou are awareof the numberand nature ofthe differentfood safety andsocial standardsschemesoperating,including theirimpact andcredibility.

Greaterconsumertrust instandards.

Avoidsreputationalrisk

Allowscompaniesto showconsumerssteady,meaningful

and verifiableimprovementsfor teafarmers andtheir workers

Standards helprather thanhinder realquality and socialimprovements

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Responsible purchasing in practice

It is not easy for buyers to ensure thatthey have a positive impact on thefarmers and workers who produce thetea they sell. There are no quick fixsolutions or easy answers. However,buyers are important players in thechain with considerable power andopportunity to improve conditions.

Some businesses are already practicingmore responsible purchasing and arereaping the benefits.

Teadirect: A shift in attitude

Teadirect is the tea brand of the UK Fairtradecompany Cafdirect plc. In addition to buyingdirectly only from known, mostly smallholder,suppliers and working on yearly forecasts thatallow suppliers to plan, Teadirect operatesin a number of innovative ways. Togetherwith suppliers, the company holds workshopsannually to review and set a locally appropriateminimum price based on the cost of sustainableproduction. The company sees its suppliers

clearly as supply chain partners leadingto a more equitable sharing of risks andresponsibilities as well as benefits from the teatrade. In fact all partners/suppliers now holdfive per cent of shares of the parent companyand their representatives sit on the Board toshape strategy.

In terms of working together anddemonstrating long-term commitment,Teadirect has been supporting its partnersfactories over many years in a variety of ways tostrengthen their business capabilities and skills.Some recent examples are assisting factoriesefforts to become HACCP compliant, findnew markets, improve quality and in Ugandasupporting a factory to develop local teapackaging facilities. This approach is deliveringtangible benefits - Teadirect is growing at overseven per cent year on year.

Yorkshire Tea: Quality approach pays

Yorkshire Tea is part of Bettys and Taylorsof Harrogate a family-run business. Theiremphasis is on building relationships. Theyonly buy from factories where they have builtup good relationships. Even when they buythrough auction they inform that factory whatthey have bought from them when they nextvisit. This allows them, despite being a relativelysmall buyer, to support those factories toproduce the type of tea Yorkshire needs for its

blend.

Tasting with the growers is particularlyimportant as it allows buyers to discussrequirements directly with those involved inproduction, helping them to adjust productiontechniques to what works. They believe thattheir success is intrinsically linked to that of thegrower and they are happy to put their moneywhere their mouth is. They have concretequality incentives - if a factory produces exactlythe right type of tea for them they are paida price premium. There are clear commercialbenefits for Yorkshire Tea to this way of doingbusiness. They have tailor-made quality productfrom producers who they know and trust.This allows them to plan for the growth oftheir brand. And despite the declining UK teamarket, Yorkshire Tea is growing in value andvolume year on year.

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Investors

Understand and take into consideration theimpact that the purchasing and pricing practiceso the companies you invest in have on theviability and proftability o their supply chainpartners on whom they depend or the fnalproduct. I you are not happy with theirpractices, consider moving your investment.

All the dierent actors in the tea supply chainhave a role to play in making sure that risks andopportunities are more airly balanced.

Individual consumers

Ask questions at work or in caes about howtea is purchased. With enough pressure romconsumers, supermarket and tea companypractices will start to change.

Ask the tea company you buy rom to tell youwhere and who they buy their tea rom. Do theychop and change depending on where they canget the cheapest deal or do they commit to agroup o suppliers over a longer time period?

Demand more inormation rom the tea

companies about their pricing policies especially i its cost less than 1p a tea bag! Askthem to publish what they pay and how muchtea workers are paid.

Demand more inormation rom tea companiesand retailers about the impact o their eorts tobe more responsible has this just added to thepressures that actories and armers ace or has itbrought real benefts?

Put pressure on the UK Government toimplement the recommendations below.

UK Government

Support tea armers to have a stronger voice ininternational bodies as well as in EU or privatesector standards setting.

Ensure that aid programming does notcontribute to the global oversupply o tea.

Support the initiative that Arican countrieshave taken at the WTO to improve policies orproducers o primary commodities, includingmechanisms such as supply management andgreater value-addition in-country.

Support initiatives which help armers toorganise themselves into groups to help withjoint marketing, buying inputs or negotiatingprices.

Investigate the impact that the concentration obuying power in the hands o a ew retailers anda ew brands has on competition, consumerchoice and on international development targetssuch as the Millennium Development Goals.

Ensure UK companies understand, report on,and are held accountable or, their actionsoverseas.

Wider recommendations

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Traidcrat ExchangeUnit 30616 Baldwins GardensLondonEC1N 7RJUK

Tel: +44 (0)207 242 3955Fax: +44 (0)207 242 6173Email: [email protected]

The publication o this report has been undedthe Department or International Development

Acknowledgements

We would like to thank all those businesses, researchers,

investors and NGOs who have helped in compiling thisreport. In Kenya we would particularly like to thank JacobOmolo o IPAR or the initial research and Ian Gatere o IECStrategy Ltd or researching and writing the case studies.

Photo credits

Cover photo by Shailan Parker.All other photos by Charles Kamau, IEC Strategy Ltd.

References

* Names have been changed and aces blurred to protect theidentity o these workers.

1 Throughout this report tea is used to reer to products maderom the shrub camellia sinensis, whether green tea or blacktea. Tea made rom ruit or herbs is not included.

2 The report draws on research conducted or Traidcrat byJacob Omolo o IPAR in Kenya, Impact o UK PurchasingPractices on Small and Medium Business in KenyaSeptember 2006.

3 International Tea Committee, Annual Bulletin o Statistics 20064 Tea Board o India, Tea Board o Kenya, websites 20075 International Tea Committee, Annual Bulletin o Statistics 20066 Food and Agriculture Organisation The State o Agricultural

Commodity Markets 20047 International Tea Committee, Annual Bulletin o Statistics 20068 International Tea Committee, Annual Bulletin o Statistics

2006. Please note these fgures are approximate and are basedon the assumption that all tea retained in producer countriesand all imports into countries have been consumed.

9 Mintel, Tea and Herbal Tea, UK Market report February 200510 Euromonitor Hot Drinks in the UK Executive Summary

August 2006. Speciality tea fgures rom Mintel 2005 as above11 UK Tea Council website 200712 UK Food and Drink Federation Out o Home Group various,

see www.outohome.org13 Mintel Tea and Herbal Tea Market report February 200514 UK Competition Commission, Emerging Thinking, January 200715 United Nations Development Programme Human Development

Report 2006

Traidcrat Exchange is the UKs only developmentcharity specialising in making trade work or the

poor. In collaboration with local partners we workto create opportunities or poor people to harnessthe benefts o trade, helping them to developsustainable livelihoods and oering them hopeor a better uture. Traidcrat also aims to use theexperience o its sister air trade company, Traidcratplc, to improve wider trade practices.

This report is part o The Responsible PurchasingInitiatives work to improve the purchasing practiceso EU companies so that minimum human rightsstandards are realised by the workers and armersin the developing countries involved in producingproducts.

We would welcome your eedback on this report.Please e-mail your comments direct to:[email protected] visit our website www.responsible-purchasing.org

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