Through their direct involvement on the production side, commencing with plantations in British India, followed up in Sri Lanka, and later shifting their bases to East Africa, London became truly an international centre for the marketing of tea. London is the only Auction Centre in the world that is not a producing country, but has been marketing teas from numerous producer countries.

London attracted widespread buying interest, where teas from a great variety of producing countries were regularly offered in competition with each other. London, because of its strategic location, provided a centre for the re-export of tea to over fifty destinations.

The auction system was acclaimed as the universal remedy for the marketing of tea. The inauguration of this system in London helped to establish a global system of tea auctions in most producer countries, thereby creating a world market for tea. This arrangement worked perfectly as long as the world’s tea production was under British control. As the industry in the producer countries developed, and became more matured, they were looking for defects in the system.

Prior to world war two, more than sixty percent of teas produced by British interests the world over, was marketed in London. After the cessation of hostilities, London auctions did not reopen until 1951, whereas sales were resumed in Calcutta in 1946, and in Colombo in 1947. Due to the problem of disposal, new auction centres were started in other producer countries.

The Chittagong auction commenced operating from 16th July 1949. East African auction centres began channelling their own teas through Nairobi in 1956, Mombasa in 1969, and Limbe in 1970. India opened up auction centres in Cochin in 1947, Coonoor in 1963, Amritsai in 1964, Gauhati in 1970, Silguri in 1976, and Coimbatore in 1981.

Most producer countries after having taken the clue from Britain, were fast to develop their own methods of marketing tea. This was all done at the expense of London. The post war period witnessed a sharp drop in the quantities consigned for London auctions. In contrast, quantities sold at the auction centres in producer countries have increased, and for 1996, Sri Lanka had consigned over 95% of its production through the Colombo auctions.

Marketing of tea in the countries of origin has a direct attraction to the producers, as it converts their produce into cash within a short period of time. Further, the change of ownership of plantations has also altered the balance in favour of domestic auctions. London does not receive the support of most of our regular buyers, who between them keep the Colombo market active. The Middle East sector, and the CIS along with the Russian federation did not operate in London, with the result producers were forced to brace Colombo, to obtain the maximum support for their teas.

London failed to keep abreast of local prices. The pattern of tea exports to the UK itself has changed, and the later trends indicated that the London auction was fast losing its importance as a source of supply to the British consumer. They started to operate more forcefully in the countries of origin, to secure their requirements. It was estimated that only about 15% of the tea consumed in the UK appear to have been purchased in London.

In addition, a number of indirect advantages were identified, that benefited the country in the long run if all Sri Lanka teas are sold locally. If all activities associated with the export of teas were conducted in the country, the earning power of both the broker and the shipper would improve. Employment opportunities in the country were bound to look up, and additional avenues for all those associated with the industry to enhance their earning power surfaced. A new perspective dawned to local exporters. With the tea industry now looking up, there will be greater opportunities for value addition, and with it the net foreign exchange earnings were bound to increase.

The London auctions no doubt served a very useful purpose during the pioneering days of tea marketing, but today, it has outlived its usefulness. The decision to dispense with the London auctions would have been taken after a great deal of deliberations amongst the members of the British tea trade. This forma is a very close fraternity of tea persons, and it would have been a very difficult task for the few people in authority to pass the ultimate resolution to wind up operations. This would have been one of the most intricate issues that surfaced during this century, for the British tea trade.

The expected shadow did fall on the most celebrated locations such as Mincing Lane, The Plantation House, Sir John Lyon House, and the London Chamber of Commerce Building, that acquired fame and esteem, due to its involvement with tea. Tea will not be traded in these locations any more. and the London tea trade will have to reset their sights, if they are to continue in tea business. This, no doubt is going to be a trying time for those Britishers involved in tea, but with the experience gained through centuries in tea marketing, they will evolve a method to remain in business.

This news no doubt came as a surprise even to those outside Britain, as the auction system originated in that country in the 17th century, for the sale of ancient books and artefacts, where its proper assessment of its true value was found difficult to determine. The first sale of this nature of which there is any record in England, was tried out in 1676 by a booker seller called Cooper. He prefixed his catalogue of rare books with “readers, it had not been unusual here in England, to make sale of books, by the way of auction, but having being practised in other countries to the great advantage of both buyer and seller, it was therefore conceived, for the encouragement of learning, to publish the sale of these books in this manner of way."

The tea auction was an institution initially set up for transferring extensive quantities of tea from China, where it was grown, to the Western world, where it was so eagerly consumed. Monopoly had been the name of the game, and this had left a permanent mark on the reputation of the British trade, and the marketing of tea was no exception. The public outcry was against the British East India Company, who held the monopoly for the conveyance of China tea to Europe.

It was only in 1836, that serious notice was given to this shortcoming in monopolistic form of trading, and for the first time, it was decreed that every chest must be auctioned at East India House. This in a way was a break away from the normal machinery of commerce.

The East India Company, being a quasi-government body, was able to enforce the law. In the midst of such accusations, the authorities felt that it was more prudent to dispose of the cargoes by public ‘outcry’ at the auction rooms rather than by private deals, where there was rich scope for corruption.

It is estimated that in the free world about 75% of the tea produced is sold through the auction system, and it had been so for the about 158 years. Marketing of tea through the auction system is the most popular method of disposal of tea It is the very nature of tea as product of infinite varieties that has made it to retain this system for such a long time. It is said that the quality of tea depends as much on nature as on man. The jat of the tea bush, soil, altitude, climatic changes, wind velocity, and seasons, all play their part in infusing the varying degrees of quality into tea. It is very sensitive to atmospheric changes, that day to day weather changes leaves their impression on the quality of the tea. Unlike most other commodities, tea cannot be designed to be brought and sold on predetermined specifications. Tea is an infinitely varied product, which needed to be sampled, and catalogued, almost accurately chest by chest.

The obvious way of establishing a value for a product of this nature, was at the auction room, where all buyers were given an equal opportunity to purchase their requirements. By 1750, the British East India Company auction system had developed. On arrival of the precious cargo, the tea chests were transferred to the company’s warehouses, and samples drawn from each chest. They were then presented to the their panel of tea “tasters” for grading and valuing. All their findings were entered into huge fat catalogues. The entire tea trade, comprising of brokers, their clients, and the London tea merchants would turn up at the East India house for the auction. Bidding for these countless lots would continue for four gruelling days. This modified strategy for the marketing of tea however, did not in any way cover up the monopolistic slant prevalent in the system. It was no other person than Mr Twining, a household word today, who missed no opportunity, to call to account the shortcomings in the system.

Some of the original customs that existed when auctions were held under candlelight, are followed even to date. A successful bidder, is given the opportunity to take up subsequent lots of equal quality, and did not have to wait until the candle had burnt down to the required extent.

The monopoly held by the British East India Company, could not be held forever. The reaction of the Americans, to the disposal of excess leaf, the imposition of tea taxes, the loss of the Chinese tea market with opium being the major cause, all surfaced at a time when the Company’s finances were sinking.

The tea monopoly held by the company came under close scrutiny, when the Company’s Charter came up for renewal. The strong urge of the London tea merchants to dispense with this monopoly was carried through in this instance. A bill calling for the invalidation of the monopoly held by the British East India Company was presented in Parliament and received the Royal Assent on 28th August 1833.

This great monopoly came to an end, and the immediate response was to bring the tea trade under the tea trader’s own management, and to change the location of the tea auction to Mincing Lane.

Many changes have taken place subsequently, in the location of the auction rooms. Mincing lane and in particular, Plantation House at once stage, was world’s recognised centre of the Tea Trade. Then the trade interests were relocated at Lyon House, where the auction rooms had the best panoramic view overlooking the river Thames. In 1990 the auction centre was once again moved to the Chamber of Commerce Building, and held in the elegant Council Chamber, considered a dignified setting for a grand event. It was from this location that the candle that was lit originally in 1750, started to dim from early last year, and was finally extinguished in June 1998.