The struggles within, friends and opponents, the Tea Board, the Tea Propaganda Board and CTTA

Excerpted from the autobiography of Merrill J. Fernando

If the chokehold that British interests exerted on the local entrepreneur was not strong enough to stifle him, the additional pressure needed to hobble him further was created by the machinations of the vested interests within, both wittingly and unwittingly aided by a shortsighted bureaucracy and trade associations with self-serving agendas. My relationships with all these organizations have been contentious and confrontational. Over the years I have been unapologetically critical of many of their policies and strategies, which I considered to not be in the best interests of the local brand builder and exporter.

The Ceylon Tea Traders’ Association (CTTA) came into being in 1894, in the early formative stages of the tea export trade, to mediate on behalf of growers and exporters and to solve their problems. It was a creation of the British and given the nature of colonial dominance of the country then, it was but natural that protection of British interests within the industry would be its first priority.

The Ceylonese ‘native’ tea traders who were in the minority till the late 1960s, permitted this state of submissiveness to colonial domination to prevail for decades after Independence. Whilst the CTTA committee comprised equally of sellers and exporters, five representatives of each, it was still dominated by Europeans.

The general insensitivity of the CTTA to needs of locals was exemplified by an incident in 1968, when the committee refused to suspend the tea auctions for an hour or so, to enable Muslim members to visit the mosque, on an occasion when an important Muslim religious festival coincided with an auction day. I discussed this matter with the late Abbas Akberally, then Chairman of Akbar Brothers and tea exporter Amin Suby, who were both of the firm view that a change in the CTTA representative body was an urgent need. The resentment caused by this episode eventually crystallized in a changing of the guard in the CTTA, with the ‘native’ segment taking control of its affairs for the first time in its history.

For the first time the post of Chairman was contested, and Austin Perera from the Cooperative Tea Society was voted in. The next and even bigger shock was when all Europeans in the buyer segment, with the exception of George Willis, then Chairman of Lipton, were ousted and replaced by five local shippers: Co-operative Tea Society Ltd., M.S. Heptulabhoy & Co. Ltd., Merrill J. Fernando Co., Suby Tea, and Van Rees Ceylon NV. It was a ‘palace coup,’ which the ruling parties were ignorant of until they were deposed.

Ilika De Silva, Promoting Pure Ceylon Tea at the London Tea Centre

Despite the first successful Ceylonese incursion into what had always been a closely-guarded preserve of British interests, there were subsequent attempts by interested parties to dilute the local influence. In 1969, an unusually large number of plantation companies in the Whittall Estate Agency, applied for membership of the CTTA. I opposed this strongly on the grounds that plantation interests were already adequately served by the Planters’ Association and that it would be inequitable to permit the sellers to outnumber the buyers in the membership of the CTTA. The subsequent vote endorsed my view, with the support of George Willis, who was one of the few servants of British interests to objectively view the aspirations of local exporters.

An objective insider speaks

The relevant extract (reproduced below) from the book ‘George Steuart & Co. Ltd., 1952-1973, A Personal Odyssey,’ by Tony Peries, former Chairman of George Steuart, provides an illuminating insider’s view of this historically significant episode. In a few well-worded paragraphs, he also outlines the impediments and obstacles which then existed to the advancement of the local exporter, and to the cause of Pure Ceylon Tea, globally.

[QUOTE:] The Colombo Tea Traders Association (CTTA) made the rules under which tea auctions were held and to buy at the auction a firm had to be a member. More or less the same firms comprised the five buyers/ five sellers committee year after year, and Forbes and Walker was always the advisory broker who had no vote. The buyers, from memory, were Brooke Bond Ceylon Ltd., Lipton Ltd., Harrison & Crossfield Ltd., Heath & Co (Ceylon) Ltd., and M.S. Heptulabhoy & Co. Ltd. The sellers were Carson Cumberbatch & Co., George Steuart & Co. Ltd., Gordon Frazer & Co. Ltd., Colombo Commercial Company and Whittall Boustead Ltd. .

As many as 411 the sellers save George Steuart and Frazer were also buyers of some significance, but I never saw or even had reason to suspect firms with dual interests doing anything adverse to affect their selling side and if anything, they occasionally gave their own teas a bit of help. However, criticism of firms ‘on both sides of the fence’ was rife.

By 1967, the small Ceylonese firms, most of them dwarfed by Brooke Bond, Lipton type giants, far outnumbered the long-established British outfits on the CTTA membership list. The owner of one such firm was Merrill J. Fernando, who had started life at A. F. Jones & Co. Ltd., become a Director there, and subsequently opened up his own firm under his name. Among those smaller firms, the majority was owned by the Muslim community. Heptulabhoys was the most significant, but Jafferjees and T Suby were also well known and respected.

The local traders, identified by the expatriate community as ‘natives,’ -felt that their needs were ignored by the CTTA (the old diehards like George Savage actually wrote N’ for native in their catalogues as they could not bother with long local names like Heptulabhoy!) A typical example was the committee’s refusal to suspend the tea auctions for an hour or so, on one occasion, on, to enable Muslim members to visit the mosque on a particular festival which fell on a tea auction day, having initially refused to reschedule the auction date. That same year the small exporters worked together to throw out the previous committee, leaving only George Steuart from the old brigade.

It fell to Merrill to give leadership to the newly-elected committee. He was intelligent, articulate, and forceful. His main objective was to get on the committee of the Ceylon Tea Propaganda Board (CPBT), where the CTTA had ex-officio sellers and buyers nominated by the committee. I had only a nodding acquaintance with Merrill and when the nomination paper came to me, I refused to endorse his nomination, which caused an awful stink.

My concern was that he lacked the knowledge to be on the CTTB. After some days of impasse, Arjuna Dias, a Tea Director at Somerville & Co. Brokers) and a close friend of Merrill, approached me with the suggestion that Merrill and I have a private meeting ng at which he would state his case.

I agreed and he very magnanimously came to 91 Steuart Place one evening, with Arjuna. Merrill’s argument was that the CTPB generated enormous amounts of money to spend on propaganda, as every pound of tea exported attracted a cess for propaganda (and research too) but that the control of that money was far too loose.

He certainly had a point, as in those days most of the propaganda money was, at the tea traders’ insistence, spent on generic propaganda, that is, tea advertised as tea and apart from the Lion symbol, which the packers were allowed to use on their packs, provided the blend comprised 50% Ceylon Tea, along with the legend `Pure Ceylon Tea, there was little done to promote Ceylon Tea specifically.

The pack contents of Ceylon Tea had to be unpoliced and the bona fides of the packers depended on a gentlemen’s agreement. Whilst I have no reason to believe there was large-scale cheating, the situation was really not very satisfactory as the major packers were in the excellent position of benefiting from tea (not Ceylon) advertising, at no cost to themselves. The CTPB ran ‘Ceylon Tea Centres’ in London and various other major cities but their impact was minimal and the London Centre, for instance, though it a fine location in the Haymarket, was best known as a good lunchtime curry house.

Merrill was by then selling some tea in Italy and other parts of Europe, but I remember Italy particularly as the CTPB representative there was a man named Egidio, who Merrill maintained was totally unhelpful to members of the trade. Merrill ‘s point was that the money spent on generic promotion and on promoting foreign-owned brands should now be expended towards helping the development of Ceylonese-owned brands.

Tony Peries — Then Chairman of George Steuart & Co, assisted me with the Ceylon Tea Propaganda Board

When we met at Steuart Place we did not discuss all this detail, but I agreed to support Merrill’s nomination. We parted friends and have remained so ever since. Merrill is the one man who has over the years established his ‘Dilmah’ brand very successfully just about everywhere in the world. I am aware of how very difficult it is to get a new brand in to the Australian supermarkets, where Dilmah’ is now widely stocked, so he has taken a hard road and persevered in putting truly pure Ceylon Tea, packed in Ceylon, on the map. I am only sorry I ever opposed him. [END OF QUOTE]

I was very pleased that Tony considered the issues sufficiently important, for them to be given prominence in his memoir, written more than 30 years after the episode. After moving to Australia in 1973, Tony carved out a very successful career for himself in the private commercial sector in that

country. About eight years ago, when I was visiting Australia, he got in touch with me with a request to address a meeting of the Sri Lanka-Sydney Business Society, of which he was the Chairman. He had always been highly appreciative of the success of Dilmah and was very keen on my explaining to the gathering, my vision for Ceylon Tea and the success of Dilmah.

I accepted with pleasure as that would have also given me the opportunity of meeting up with many of my Sri Lankan friends in Australia. However, having accepted the invitation, I realized, to my utter dismay, that the SLSBS event would coincide with a public relations event featuring 26 important journalists in New South Wales, in which I was due to appear. Eventually I compromised by making a short address at the SLSBS event and answering a few questions, before making an early departure.

Promotion of pure Ceylon tea, obstacles and pitfalls

The incisive observations of Tony Peries an objective and knowledgeable insider of the plantation industry reproduced in the previous chapter, clearly demonstrate the self-serving nature of the very organs established to assist the trade and the exporter.

The Ceylon Tea Propaganda Board (CTPB) became active in the early 1930s and was incorporated with the present Ceylon Tea Board, when the latter was established in 1976. The Chairman of the Tea Board was invariably a political appointee but the organization functioned under a full-time Director General. The first Chairman of the Tea Board was Ajith Goonatilleke, who had earlier been a Senior Estates Management Executive at the George Steuart agency.

There were also periods when the Chairman of the Tea Board and the Secretary of the Ministry of Plantations was one and the same individual, for instance the career civil servant Bradman Weerakoon. I believe that at the outset, Goonatilleke’s appointment as Chairman of the Tea Board and his substantive position as Secretary to the Ministry of Plantations, under then Minister Ratnasiri Senanayake, may have briefly overlapped.

Before the emergence of Ceylonese exporters as a force in the trade, most of the private trade representatives were from multinational companies, including Lipton and Brooke Bond. Therefore, understandably, British interests received priority support whilst there was no voice to promote Sri Lankan interests. I served two terms as a member of the CTPB, in the 1960s and ’70s, but several proposals I submitted regarding the establishing of Sri Lanka brands attracted little or no support, from the Board and the Secretariat.

I was deeply pleased by my appointment to the Ceylon Tea Propaganda Board, as it provided me a great opportunity to present to an important body, the views of a practicing tea trader. The Chairman was M.A. Bartlett, then a Director of Carson Cumberbatch, and the Secretary was Clarence Cooray, who had been with the CTPB for quite some time. The other members of the Board were chairmen of agency houses, brokers, and representatives of the smallholders.

At the very first meeting, when I spoke of the need for the promotion of value-added export of locally-owned brands, whilst Bartlett was very supportive, Maynard, Chairman of Brooke Bond, strongly vetoed the idea. His argument was that value addition at source would require blending from multiple regions and that it would not be practical.

Consequent to Bartlett’s term and Cooray’s retirement, Bertie Warusawitharana, a well-known planter from the south, was appointed Chairman, whilst Elmer Martenstyn, who had been Executive Director of the CTPB in the early 1970s, was appointed Director General and Victor Perera, Secretary. The then situation in that Board was such that Perera had filed an injunction against Martenstyn, and the two were not on speaking terms. Martenstyn was resentful of my inquiries regarding this issue but I was supported by two other Board members, Park Nadesan and Buddhi De Zoysa, the Treasury representative. Another member of the Board who supported new initiatives and new thinking was the late Stanley Jayawardena, then Chairman of Unilever.

The CTPB had within its ambit, both an overseas and a local marketing committee. The Commissioner of Domestic Marketing was one Arasanayagam. Inquiries that de Zoysa and I made revealed that although funds had been allocated for a tea promotion campaign in the east and the north, the tea had simply been handed over to some State institutions for distribution. Eventually, the Minister ordered the CTPB to immediately stop the “futile” campaign to promote tea locally (Ceylon Observer, 4 April 1969).

At the end of my first term, I found out that Martenstyn had privately requested Conrad Dias, then Secretary of the Chamber of Commerce, to nominate a less-confrontational individual. Much to Martenstyn’s displeasure, I was nominated by the Chamber for the second successive term.

The CTPB came in for severe criticism by the Minister of Plantations, Colvin R. de Silva, for its “disregard for promotional” work, its inappropriate appointments to the overseas Tea Centres, such as that of an Egyptian with no previous experience on tea to its Cairo office, and the employment of Kenyan girls at the London Tea Centre, despite the easy availability of Ceylonese girls in London (Ceylon Daily News, 2 July 1971).