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Sri Lanka tea market in Middle East seen threatened
08 Feb, 2012 12:56:40
Feb 08, 2012 (LBO) - Sri Lanka might be in danger of losing part of its market for tea in the Middle East, one of its biggest markets, as younger consumers are shifting away from the beverage.
Hilmy Cader, chief executive of MTI Consulting, said his international management consultancy based in Bahrain had observed a change in tea consumption patterns in the Middle East.

"Tea, other than iced tea, is still having major challenges in appealing to the younger generation," he told an international tea convention in Colombo.

"A lot of what we do is in the Middle East and we're clearly seeing a shift away of the younger generation of Arabs moving away from tea which their fathers and grand parents consume and which formed your major market."

The Middle East is the biggest regional market for Sri Lankan tea next to Russia and the former Soviet states.

In the period January - November 2011, Russia remained the top export markets for Sri Lanka, followed by Iran, Syria, the United Arab Emirates, Iraq and Turkey.

A key reason for the fall in tea prices in 2011, especially for the island's low grown teas which make up the bulk of output, was the political unrest in the Middle East, tea brokers said.

Cader also said Sri Lanka would have to contend with changes in buying by importing countries with a shift away from traders to retail chains.

"Looking at retail trends, we see that all products are bought off the shelf or consumed from restaurants," he said.

"Whether we like it or not, the penetration power of supermarkets is increasing. Sri Lanka's relationships with partners in emerging markets is becoming reduced because that power is shifting to retail chains.

"This is the middle class - this is where they are going to buy tea. The decision-making is very different from the previous one of working with traders in the Middle East and Russia."

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1. Lutronman Feb 08
Why cannot Tea Manufcturers in Sri Lanka get out of String & Tag bagging method. They should do the products like in proper tea bags (Sealed)! Everytime I give a String & Tag tea pack one of my overseas friends the comment on this 19th Century tea bag!