Behind the Bamboo Curtain

HAMBURG, Germany – While China is the world’s largest producer and one of the world’s biggest tea exporters, less than 1% of China’s tea is exported to Europe.

WTN141006_ART_ChinaSource_the Anji white tea bushes budding in early SpringGenerations past enjoyed far greater access to China’s fine teas but strictly enforced European Union import standards for food safety represent a high barrier.

There are several reasons Western buyers find sourcing tea in China a challenge, explains Marco Sinram, a trader with 25-years of experience who heads Gebrüder Wollenhaupt GmbH Tee’s trading department.

Sinram addressed tea professionals at COTECA 2014, the Coffee-Tea-Cocoa show held in Hamburg, Germany the last week of September. His presentation on “Transparency and Product Safety Risk Management in Purchasing Chinese Teas” holds valuable lessons for buyers dealing direct with Chinese suppliers.

WTN141006_ART_SinramWollenhauptSinram said that China’s domestic market consumes all but 18% of the 1.85 billion kilos of tea processed in the country’s 15 primary growing regions. China today is a nation with thousands of individual trading and producing companies, a significant change following the 1978 privatization of the industry, explained Sinram.

Hamburg’s Wollenhaupt is a $60 million company that has been trading globally for more than 130 years during which it has developed “a very close and special level of relationship with the right suppliers,” according to Sinram.

The high prices paid in the domestic market for a wide variety of Chinese teas from many origins is in contrast with Western preferences for standardized teas produced with high-tech manufacturing processes at low prices.

The Chinese use simple, traditional manufacturing processes to produce the finest tea, he said. There is little awareness of sustainable practices and low food safety standards leading to chemical residues that often exceed Europe’s Maximum Residue Levels (MRLs), he said.

Tea shipments found to exceed limits for the 458 chemical residues on the European Union list are generally abandoned at dockside, a total loss to suppliers and a disappointment to buyers.

Sinram offered several insights on practices behind the “bamboo curtain” including observations that the origins of purchased tea are often untraceable and that suppliers will always say ‘yes we can…” only to disappoint. Commitment to contracts is lax, he said.

He recommended “a truly representative sampling” before shipment and on arrival. Due to limited supply, consistency is beyond the ability of many growers so it is imperative to assess the garden and factory and consider tea storage, he said.

WTN141006_Wollenhaupt_LogoWollenhaupt has exactly implemented these solutions with established, reliable sampling and storage options that ensure quality and transparency along the entire length of the tea supply chain anchored in China, he said.

Sinram had high praise for a number of third-party certifiers. This year Wollenhaupt became the first trading company to join the Ethical Tea Partnership and the company trades with many gardens certified UTZ Sustainable, Fair Trade, Rainforest Alliance and international organic certification (versus China’s organic standard). There is an increasing trend toward organic production (domestic and export) but much greater demand than supply, he said, adding that “true organic specialty tea is difficult to find.”

Product safety concerns include concentration of heavy metals, pesticides, contaminants and allergens as well as foreign matter. Sinram estimates that 20% of China’s farmland is polluted. Random checks by European Union border authorities touch no more than 10% of the tea. “Make sure the product you are buying is compliant with legal requirements,” he cautioned.

Sourcing in China enables wholesalers and retailers an opportunity to provide customers exquisite teas but it requires a “long-term commitment to helping your supplier improve,” he advised. “Be prepared to pay the cost of proper risk management.”

CATEGORIES
COTECA, Industry Insight, News
Dan Bolton

About Dan Bolton

Dan Bolton edits STiR Tea & Coffee Industry International. He was formerly editor and publisher of World Tea News and former editor and publisher of Tea Magazine and former editor-in-chief of Specialty Coffee Retailer. He is a beverage retail consultant and frequent speaker at industry seminars and conferences. His work has appeared in many beverage publications. He was a newspaper reporter and editor for 20 years prior to his career in magazines. Dan is the founding editor of Natural Food magazine and has led six publishing ventures since 1995. He lives in Winnipeg, Canada.