Money Markets

Tea farmers to benefit from value addition deal with UK’s Marks and Spencer stores

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Tea pluckers at work. Marks and Spencer, a major retail outlet in Britain, will start stocking packaged tea directly from a factory in Nyeri — a move that could mark increased partnership between Kenyan tea factories and retail outlets in Europe.

Tea pluckers at work. Marks and Spencer, a major retail outlet in Britain, will start stocking packaged tea directly from a factory in Nyeri — a move that could mark increased partnership between Kenyan tea factories and retail outlets in Europe. 

By Rawlings Otini and George Ngigi

Posted  Thursday, November 17  2011 at  20:58

Marks and Spencer, a major retail outlet in Britain, will start stocking packaged tea directly from a factory in Nyeri — a move that could mark increased partnership between Kenyan tea factories and retail outlets in Europe.

Farmers from the little known Iriani Tea Factory, located four kilometres off the Othaya-Nyeri highway, are set to enjoy increased earnings following the launch of the tea value addition centre.

Marks and Spencer head of sourcing Louise Nicholls said the supermarket will boost speciality Kenyan tea consumption in Britain through its 700 branches.

Partnering with retail outlets boosts efforts to brand Kenyan tea and differentiate it from similar products from across the globe, creating a niche market for the country.

Kenya accounts for 24 per cent of the international tea market share.
Facilitators of the transaction, Fairtrade Africa, said the success of the project between Marks and Spencer and Iriani tea will see other retailers, such as giant outlet Sainsbury, seek to enter similar arrangements, upholding the practice of ethical sourcing which is highly valued in Britain.

Under ethical sourcing, outlets seek partnerships that have impact on the lives of disadvantaged or developing communities, contributing to raising their welfare.

More than 21 million people visit Marks and Spencer’s over 700 stores in the UK annually. Over half of the retailer’s business is in the food business.

In the pilot project, Iriani Tea Factory will deliver 1,350 kilogrammes of value added and packaged tea to the outlet in what could culminate into a long term contract.

The first 10,000 packets, which bear the Fairtrade brand mark, leave the country on November 20.

High hopes

The farmers have high hopes that the product will be well received, warranting an official launch tentatively planned for February next year in Britain.
Iriani Tea Factory is fully owned by 6,000 farmers who are also its source of raw materials.

This year, the factory received Sh536 million from tea deliveries with Sh402 million being paid out to farmers.

The members look forward to receiving higher returns from the sale of processed tea. Kenya exports most of its tea, 95 per cent, in bulk raw form at the Mombasa auction.

At the auction, a kilo of the beverage fetches an average of $2.50 (Sh250), but with the value addition it will fetch approximately $6 (Sh600) with $0.50 (Sh50) being premium earned for selling under the Fairtrade mark.

The shilling, which has been battered for the better part of the year, could benefit from such initiatives which would increase the value of our exports tilting our balance of payments to a favourable position.

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