UK Retailers Concerned About Tea Supply
By Dan Bolton
Shipping company executives see no sign of improvement for vessels transiting the Red Sea, leading UK retailers and tea companies to take steps to minimize shortages.
As shipping costs surge, suppliers in Kenya and India face a more daunting challenge. Rates from Asia to Europe are up nearly five-fold, rising to $5,000 per 20-foot container. During the height of the pandemic, the expense of shipping containers of tea long distances exceeded the value of bulk tea within.
Three months into the crisis triggered by the war between Israel and Hamas terrorists, Yemen’s Houthi rebels continue their drone and missile attacks in both the Gulf of Aden and the Red Sea.
Executives of the largest shipping companies told Bloomberg TV that threat levels continue to escalate. The disruptions could last an entire year.
Maersk Chief Executive Officer Vincent Clerc told Bloomberg TV, “The amount and range of weapons being used for these attacks are expanding, and there is no clear line of sight to when and how the international community will be able to mobilize itself and guarantee safe passage.”
Half of the tea consumed in England is shipped from Kenya and India via the Suez Canal. This week, executives at Yorkshire Tea and Tetley Tea reassured the public they had implemented measures to minimize any disruption of the blending and manufacturing due to shipping delays.
A spokesperson for Tetley told the BBC “At the moment it’s much tighter than we would like it to be but we’re pretty confident we can maintain supply levels. Our priority is to maintain our consistent high levels of service, based on ordered and forecasted demand. We believe we can continue to deliver this, but acknowledge that this is a critical period which requires our constant attention.’
Spokesman Tom Holder of the British Retail Consortium, representing 200 retailers, reports temporary disruptions in the scheduled arrival of some black tea, but delays thus far amount to no more than a “blip.” Companies are adjusting orders and inventory to account for 10 to 14 additional days at sea. Sainsbury’s website assured customers of adequate supply but expressed concern should shipping firms experience lengthy delays.
According to Reuters, more ships are re-routing via the Cape of Good Hope than transiting the Red Sea via the Gulf of Aden.
BIZ INSIGHT – Britons drink about 100 million cups of tea daily, according to Sharon Hall, chief executive of the UK Tea and Infusions Association. The UK is the world’s fifth largest tea importer. Tea imports from outside the EU amounted to 104 million kilos in 2021. UK blenders export about 9.5 million kilos of tea valued at two million British pounds ($2.5 million in US dollars) annually, mainly to the European Union.
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