The Local Market.

The following is from the Calcutta Englishman on the subject:—

The letter of our correspondent “A. E. T.” calls attention for the hundredth time to the failure of the planting interest to make the most of the local demand for Indian Teas. It is only necessary to compare the prices realised at the public auctions with those at which even the most liberal of our retail firms offer to supply their customers with such Teas to see that but a very small fraction of the difference between the prime cost of the Tea and what the consumer has to pay for it goes into the pocket of the planter. It is probably no exaggeration to say that while the consumer pays, on the average, from twelve annas to a rupee per pound more than the actual cost of the Tea laid down in Calcutta, the planter may think himself fortunate if he can appropriate from half an anna to an anna of this sum. By whatever course of argument the fact may be justified, it is certainly not justifiable by the equity of the case as it appears to ordinary minds. For it is the planter who has borne the heat and burden of the day, and the proportion which the capital invested by him bears to the ultimate return is immensely greater in his case than in that of the retail dealer.

On whom does the blame for the continuance of this state of things, if blame there be in the matter, rest? Hardly on the public. They would only be too glad to allow the Tea planter, say, four times his present profit instead of allowing twelve times that profit to a middleman or a series of middlemen. The public, however, can give their custom only to those who bid for it, and who consult their convenience in the arrangements they make to secure it.

It is evidently the planter, and the planter alone, who can move in the matter. But whether out of regard for the interests of the retail dealer, or from a belief that the game is not worth the candle, he does not move. If there were a retail Tea trade worthy of the name, in the proper sense of the term, in Calcutta, it would probably not be to the interest of planters to enter into competition with it. But though we have many retail establishments who deal in Tea, its sale is, in the great majority of cases, only one item of a very multifarious business, the profit on which, as a whole, is probably not excessive under all the circumstances of the case.

As to the game not being worth the candle, that is possibly the case if only the present demand is considered. But we are persuaded that it is otherwise if regard is had to the expansion of which that demand is capable.

If Indian Tea were procurable in the bazaars in parcels of moderate size at a reasonable advance on auction prices, we believe that a large native demand for it would rapidly grow up. As it is, an extensive business goes on in China Tea of the most wretched quality, some of it sold in packets of a few ounces, and some of it loose in still smaller quantities. Even in Calcutta this Tea is sold at prices which would pay the Indian Tea planter a handsome profit, while in the interior it is sold at rates which would have been high fifty years ago.

Surely a Syndicate which extends its efforts for the popularisation of Indian Tea to such distant and widely separated markets as Australia and America might profitably make some systematic effort to promote its use among the vast population at its doors.

The time may be far distant when the great bulk of this population will adopt Tea as an ordinary beverage; but the way in which the habit of using it has spread during the last ten or fifteen years, among all classes of the vast population of Calcutta, affords an indication of possibilities very well worth testing.

When last in India I wrote on this subject largely, but all to no avail. The following was one of my letters which appeared in the Tea Gazette:—

The Market at our Doors.—Consumption of China Tea in India.

The Statesman, in a recent article, observes as follows, while discussing the maritime trade of British India:—

“Perhaps the most anomalous import we have is Tea. It is hardly conceivable that while Indian Tea continues to advance in public estimation at home, we should not only use China Tea in India, but that in increasing quantities.”[93]

In 1876-77 the imports of China Teas were a little under two millions, but in 1880-81 as much over three millions! The Statesman states, and truly, that the reason of this is simply “that Indian Tea is sold in too large packets to be easily obtainable by the general public, for it seems, as regards Indian Tea, the smallest quantity that can be bought is one pound, whereas an ounce of China Tea can be purchased.”

Further on, the Statesman kindly alludes to my advocacy in the Tea Gazette of a company to sell Tea in small packages to the natives, stating also that such a trade is “capable of almost unlimited expansion at a fair profit,” which is exactly what I have, for some time, been trying to hammer into the heads of those interested in the Tea industry of India.

Now, Sir, is it not absurd that while the bête noir of our industry is “supply in excess of demand,” and while, with this dread, we are trying (it seems with success) to open up new markets at the Antipodes and in America, we are neglecting a market at our very doors, the limits of which, I hold, no man can foresee, for is it not a market where the possible buyers number 200 millions?

Is it not also more than absurd, nay a very shame to those interested in our industry, that while we have a better article than China Tea, we allow, by our supineness and lack of enterprise, more than three million pounds of an inferior article to be sold in the birth place of the better? And why? simply because we will not supply it in the form the teeming crowd of natives willing, nay anxious, to buy can avail themselves of it!

Since I advocated in your paper the formation of a company to sell Tea to natives in small packets, and showed, I thought conclusively: 1—That the capital required was not large (say one and a-half lakhs). 2—That the shareholders might expect very fair dividends. 3—That there was no assignable limit to the trade which might be developed. 4—That if such a company was started and worked well, all fear for the future of Indian Tea would be at an end. 5—That every Tea owner, who became a shareholder, would advance his own interests by many times more than the dividends he would receive—since then I have obtained from England estimates of all the machinery required to bulk and pack the Teas, advice from the best firms as to the mode so successful in England, and I am more than ever convinced that the company would be a money-making one, and that, in two words, we shall sadly neglect our own interests if we do not accomplish it.

Again, since my former articles I have spoken to dozens of Tea planters and Tea owners on the subject, and all of them think highly of the scheme, while many only wait for the company to be launched to take shares. I could name more than one influential native also who is willing to join, and this is a good sign, for, in my opinion, a moiety of the directors should be natives. I will myself become a large shareholder, though I cannot offer my services on the board, for it must be in Calcutta, and I do not reside there.

I am convinced, if the company is launched, the shares will be taken up in a week.

But if no one in Calcutta is public-spirited enough to launch such a company, why should not an association of a few individuals try to carry out the scheme. I quite believe Tea proprietors would help them, at starting, by supplying, on reasonable credit, the coarse Teas suitable. Were this done, the thin edge of the wedge would be driven in, and, if the association succeeded, they might later transfer the business at a fair profit to a company.

I had written so far when I saw your remarks on the same subject in your last issue. I cannot agree with you in thinking an association would be better than a company, but I say, failing the last let us have the first—in fact, let us make a beginning.

I give here below, to save the trouble of reference, the last part of my former article:—

“I will now, in conclusion, shortly estimate for how much two and four ounce packets could be sold to the consumer.

“Supposing suitable Teas could be bought at six annas per lb. (and all Tea planters know that a very large supply of broken Teas with some red leaf would be available at that price), one ounce would equal 4½ pie or 9 pie for 2 ounces. We may then calculate thus for each 2 ounce packet:

R.A.P.
Tea009
Tin foil, company’s mark, labour of making up packet, wear and tear, bulking machinery003
Profit to company003
Price at which company could sell 2 ounce packets013
Profit to dealer or middleman003
Profit to retailer003
Cost to consumer for 2 ounce packet019

“As making up a 4 ounce packet would be cheaper in proportion, and the profit to company, middleman, and retailer need not be double the 2 ounce rate, we may fairly say that 4 ounce packets could be sold at 3 annas.

“I have sent to England for an estimate of the necessary machinery, so that if my project meets with favour, there will later be no delay on that score.”

Surely the above figures, and I believe they are sound, have the look of success about them.

I hear it has been suggested that paper packets would deteriorate by keeping, but protected by a good wrapper of tin-foil inside, I feel sure this would not be the case.

Edward Money.

Nothing has been done to this day; and thus, to our shame be it said, we are allowing a market capable of indefinite expansion to remain dormant.

[CHAPTER XXXV.]
MAKING INDIAN TEA KNOWN IN THE UNITED KINGDOM.

Several plans have at times been proposed in India with a view to make the merits of pure Indian Teas known in England. When I was last out there I saw the following letter in the Calcutta Statesman, and it appeared to me the plan suggested was in every way an excellent one:—