Cost of your cuppa set to climb

Prepare to pay more for your cuppa. Worries of a 'tea cartel' are brewing after talk of new supply controls, designed to drive up prices. Price climbs could be on the way after tea producers from India, Sri Lanka and Malawi - amongst other places - announced a new partnership.

But isn't it time you paid a bit more for your brew?

Stirring up costs

Look at the price of coffee, for example. In most major UK cities a latte or cappuccino will cost anything between £1.80 and £2.50, with often big variations in quality. A 250 gram bag of real coffee at your supermarket will cost you around £2.50 - £3.

Tea, on the other hand, is cheap. For example, 160 bags of Sainsbury's Red Label Fairtrade tea costs £2.57. That works out at 1.6p per cup. You'll pay far more than that at a cafe, obviously. But tea is far cheaper than coffee, by any standards.

1997 prices

"We're paying in real terms the same price for our tea 10 or 15 years ago," says Richard Anstead from the Fair Trade Foundation. "From a Fair Trade point of view, workers on estates are paid the local applicable minimum wage, but we would like to get workers up from a minimum wage to a working wage."

He adds: "We need to help consumers understand that artificially low prices, while they appear good, will lead to the unsustainability of the tea industry."

But many consumers will resent any rise, given that the cost of so many everyday consumer goods have climbed sharply in the last two years.

Supplier strain

So far there are no definite plans to try and establish tea supply controls - yet. Sri Lanka's Plantations Minister Mahinda Samarasinghe, quoted in the Telegraph, says production quotas "are not part of the objectives listed in the constitution, but I am sure these are matters which will be discussed some time in the future."

Meanwhile global tea prices are currently settled at $2.5 a kilo, someway down from earlier last year when bad weather hit Kenyan tea production (and prices), plus severe monsoons in India. Tea producers are increasingly affected by currency movements, not to mention commodity trading.

But UK tea prices are also kept in check by supermarket competition as tea remains a staple buy for most shoppers. It might yet be a storm in a tea cup. Meanwhile, keep an eye on supermarket tea prices.

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