Tea time is up for London auctions

LONDON'S two remaining tea brokers occupy different floors in the same decrepit building overlooking the Thames.

Once it was part of a crowded complex filled with tea brokers, consultants, producers, warehouse companies and buyers. The whole of London's tea world, in fact, could be found on High Timber Street.

Now only a third of the firms are linked to tea, and the building is slated for demolition.

Starting next month, London's weekly tea auctions, once the tea brokers' main source of business, will be cut back to every other week. Then in June, a tradition that began in 1679 will cease altogether.

"From a commercial point of view, it's inevitable," said John Leeder, commodities director of R Twining, a specialty tea producer owned by Associated British Foods. "From a sentimental point of view, one says isn't it a shame? This is the end of an era."

The London tea auctions have been in a cycle of decline for decades, prompted by dwindling UK consumption, consolidation in the tea trade, and the increasing power of large international tea packers and marketers such as Unilever and Tetley.

Another key factor is the rising competition from other tea auctions around the world.

When the London auctions cease, British packers and blenders will purchase their teas at auctions far closer to the tea plantations themselves, in places such as India, Sri Lanka and Kenya. They will also continue to buy tea privately through their networks of overseas agents.

"Most of our business is private anyway," said Robin Harrison, a director at Thompson Lloyd & Ewart, one of London's remaining brokers. The auctions had constituted less than half of his firm's sales for about the last three years.

At last Monday's tea auction, held in a rented room at London's Chamber of Commerce, only 407 tons of tea were auctioned. A decade ago, a typical day's auction sales would be 1,000 tons. Last week about 5,000 tons of tea were auctioned off in Mombasa alone .

The end of the London auction reflects its diminished role in a trade nurtured by the British Empire. The first auctions were held on the banks of the River Thames in 1679, when clippers loaded with chests of tea returned from British-owned plantations in the Orient.

Aside from a few years during and after the Second World War, the auctions have been held on a weekly basis in London since 1864.

So great were the volumes in the early 1900s that Indian teas were auctioned off on Mondays and Wednesdays, Ceylon teas on Tuesdays, and China, Java and other teas on Thursdays.

Even up to the 1960s, the London auctions would take up two or three days. In the cavernous amphitheatre in Plantation House on Mincing Lane - known as the Street of Tea - it was standing room only. Last Monday's auction lasted just 45 minutes.

As the London market has shrunk, so have the number of brokers who serve as middlemen. In 1959, they were 12 tea brokers in London. Today there are two - Wilson Smithett, established in 1865, and Thompson Lloyd & Ewart, an amalgamation of several firms that go back to 1760.

Partly, London's diminished role is a result of changing drinking habits. While the UK is still the largest tea importer in the world - tea consumption in Great Britain is larger than in the rest of Western Europe and the US combined - other countries and regions such as Pakistan and the Commonwealth of Independent States are catching up. In Muslim regions, where the population is rising, tea's appeal is boosted by the fact that it's cheap and non- alcoholic.

Consolidation in the tea industry is also a factor. About 75 per cent of the tea purchased at the London auctions for domestic use is now in the hands of three firms - Brooke Bond Foods, owned by Unilever, Premier Brands, owned by Hillsdown Holdings, and the privately-owned Tetley Group.

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