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Business |
Cheaper tea products buoy domestic
consumption
By BAEAU TAI
THE steady growth for Papua New
Guinea’s tea market in recent years has been fostered by pack-size
tea products at a price that is far cheaper and very reasonable
for consumers, according to a new draft report.
The Independent Consumer and Competition Commission (ICCC) said
that WR Carpenters, the sole processor of tea, primarily exports
its tea with about 10% of its total production being sold in the
domestic market.
“The large volume of its output which is exported is an indication
of product’s meeting international acceptable standards,” the
report said.
Over the last five years the volume of tea supplied to the
domestic market by WR Carpenters had increased from 429 tonnes to
641 tonnes.
This accounts for around 10% of the total domestic tea production.
“This was confirmed by WR Carpenters in a submission in which it
was noted that the company is working towards modernising its
factories in an effort to increase exports.”
“This indicates an efficient domestic industry and one which can
offer products at prices commensurate with international prices,”
ICCC said.
Despite the current 25% tariff on imported tea products, tea
importers are able to meet this additional cost and still supply
product into PNG at competitive prices.
The volume of tea imported did not exceed 10 tonnes last year,
which implies that WR Carpenters is the dominant supplier with 77%
of the market. The other tea trader, the BNG Trading, holds 21%.
WR Carpenters flagship brand of National No. 1 and Tea Pot Tea
which comes in tea bag and loose leaf tea form is popular across
the country.
The National No. 1 and Tea Pot tea sell for K2.50 to K3.50 for a
50- tea bag packet while a similar number of fully-imported tea
bags can sell for up to K16.
Packed products are distributed through warehouses in Lae and Port
Moresby while shipments to Islands regions are made through Lae.
BNG Trading entered the tea market in PNG three years ago and has
captured a portion of the market held by WR Carpenters.
BNG Trading which is one of the wholesalers and importers of tea
and other consumers products in PNG has entered into an agreement
with WR Carpenters whereby Carpenters processes and packages tea
for BNG Trading.
BNG Trading has exclusive rights for the distribution of Bushells
Tea brand in PNG.
Under the agreement with WR Carpenters, BNG Trading is estimated
to have supplied an annual volume of 175 tonnes of Bushells tea
into the domestic market.
This volume of tea has provided direct competition to the supply
of WR Carpenters and other importers of tea.
Central Bank statistics for the September quarter of 2006 shows
that the volume of tea exported during the quarter was 1,600
tonnes, the same as the corresponding quarter of 2005.
With an average export price of K3,313 per tonne, total export
receipts totalled K5.3 million.
 
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