News 1

Tea Trade With China

The UK has a very long and at time chequered history of trading Tea with China dating back to 1700’s.  This has primarily been a one way process with tea being imported to the UK from China.  This trade reached it’s peak perhaps in the late 1700’s when its value was such that smuggling into the UK was rife and many risked their lives in order the brig the tea to UK shores.  Our love affair with tea has been maintained through the intervening centuries and has shown a recent renaisance with the increasing popularity of coffee and tea houses leading to increasing consumption.

What has this to do with trade today? By the 1750’s trade in smuggled tea reached a peak but why did this happen?  The main driving force behind this was import duty imposed by the UK government.  This reached a staggering 119% and was a major source of revenue for the government accounting for 10% of revenues.  In fact the whole Royal Navy was funded from tea import duties.  Tea was in popular demand but for many beyond the reach of their budgets which resulted in a thriving market for contraband tea.  Smugglers risked loss of their vessels, lively hoods imprisonment or their lives but the profits were high and for many the risk worth taking. Whole communities became dependent on smuggling.

The problem became so big that in 1784 the government realised the duty was causing more problems than it was worth and tariffs were slashed to 12.5%. The smuggling market collapsed overnight and smugglers moved their attention to other products notably wine and spirits.  There is a very close correlation between import tariffs and smuggling and is seen today with tobacco.  Current world events including increasing tension between USA and China, UK and Europe raise the spector of trade wars and high tariffs.  This is in nobodies interest, not traders, consumers or even governments.  Will our leaders read the history books and learn from them.  History suggests they will not and the adage ‘history repeats itself’ may become a fact.  We should all put pressure on governments to avoid going down this road.

On a lighter note not all tea trade with China as one way.  We have recently started exporting blended tea back to China where there is a growing market for western products including quality blended teas. Call us if you want to know more or is you have unusual products you wish to export to China.