Tea prices surging for your cuppa

30 June 2009

http://img25.imageshack.us/img25/2875/teatime35528773556791.jpgThe price of tea in the UK is not looking too great this summer. Retailers such as  PG Tips, owned by Unilever, are sending the price of tea soaring, raising prices by 10 to 15%, and more increases are expected over the summer.

But the worst is yet to come. Firstly, continued drought conditions in Kenya, India, and Sri Lanka contribute to this. Secondly, increased demand in India and China are pushing up prices. Another factor in the UK is this year's lower value of the British pound versus the U.S. dollar. We also import more tea than most other countries, except Russia.

A box of 160 tea bags has gone up by almost 50p in June alone. This 10-15% increase is quite a jump when put into perspective: a mySupermarket price analysis at ASDA, Tesco and Sainsbury's showed that 4 pints of semi-skimmed milk went up by 14%. In one year. Prices of tea have increased by an average of 35% overall in the past year.

Supermarkets have so far mostly resisted passing along increased tea costs to customers by constant promotions, but they can only do that for so long. The United Nations Food and Agriculture Organization quoted tea production in 2008 at 3.78 million tonnes, up by 1.2% over 2007. The increased consumption however was reaching 3.85 tonnes, which creates a supply problem.

But are consumers going to change their tea drinking habit? Unlikely. Tea has been proven to be pretty recession proof, with more people putting on their kettles during economic downturns. A 50p price rise to the average consumer is probably not that noticeable, and we have taken tea drinking for granted. Or could there be a potential breaking point where the demand for tea will start dropping? Let's hear your thoughts.


  • Tom P.
    Demand for tea is relatively inelastic, as coffee prices are also up (poor crops). So we just have to live with it.
  • Joe
    I drink Sainsbury's Basics Tea. 28p and great tea. Fairtrade too. Recession? Balls to it.
  • stuart g.
    i havent noticed anything. work in morrisons but always get my tea from home bargins over the road! 100 tetely 1 cups for 99p which has been that price forever! also saw in netto tonight 1760 bags of twinnings for £12.99

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