Concerns over tea shortages are brewing in the U.K. But how serious is the threat to supply?
Unrest in Red Sea prompted fears over supply, but observers say it's a tempest in a teacup
Written in black and white, a small sign in one of the United Kingdom's biggest supermarket chains warned customers of a possible shortage of tea.
"We are experiencing supply issues affecting the nationwide supply of black tea," the sign, posted mid-February in Sainsbury's, read. "We apologize for any inconvenience and hope to be back in full supply soon."
In November, Yemen's Houthi rebels began launching attacks on vessels in the Red Sea in solidarity with Palestinians in the ongoing Israel-Hamas war.
Since then, shipping companies have been forced to stall or redirect to different trade routes, causing weeks of delays. That's caused concern on social media for Britain's legion of tea drinkers, worried that the unrest will disrupt the shipments tea retailers rely on.
Tetley and Yorkshire Tea, along with Sainsbury's, have admitted some tea shortfalls, although negligible.
CBC News requested an update from Sainsbury's on its tea supply. The grocer has yet to respond.
"The whole issue is a bit of a storm in a teacup," said Tom Holder, spokesperson for the British Retail Consortium (BRC).
"Frankly, the Red Sea has had minimal impact on the supply of tea, and anyone who has gone to the supermarket in recent days will see the aisles full of tea."
A spokesperson for Tetley echoed that sentiment and said despite the initial alarm, tea shelves have remained stocked due to successful "mitigation measures."
However, "this is a critical period, which requires our constant attention," the company said.
London-based Marco Forgione, director general at the Institute of Export and International Trade, said suppliers of all sizes will need to rely on "clever inventory management" in order to keep stock on shelves.
Consumer fears mount
Despite assurances from some of the country's biggest tea providers, customer fears over tea scarcity haven't been completely quelled.
The Sainsbury's disclaimer spurred international news coverage and inspired one woman on Airtasker, a website where users can outsource everyday tasks, to offer £200 (approximately $340 Cdn) in exchange for "15 of the biggest bags/boxes of Tetley" that could be found.
A standard box of 160 Tetley tea bags usually sells for less than $8 a box at Sainsbury's.
"Cut off the U.K.'s tea and the entire world will collapse — we get very agitated about it," said Forgione.
According to the U.K. Tea and Infusions Association, Britons drink about 100 million cups of tea each day, the raw materials for which come predominantly from Kenya and India.
While the U.K. is the fifth-largest importer of tea, it's also the world's 10th-largest exporter and supplied Canada with $16.4 million worth of tea in 2021, making up about 12 per cent of Canada's annual tea imports.
While the extent to which Canada will be impacted by the delays is unknown, the Bank of Canada warned in January that "prices for traded goods could also increase significantly" if the Israel-Hamas war broaded into a wider conflict.
Forgione said that when the Houthi rebel attacks began last November, ships transporting tea to the U.K. initially tried to stay the course and transit through the Red Sea to the Suez Canal, across the Mediterranean Sea and north to England, but have since had to reroute via the Cape of Good Hope at the southern tip of Africa.
"Rerouting adds about two weeks to the transit time for the ships and adds significantly to the costs — the fuel burn, staff costs on the ship increase," he said. "And we've seen an increase in the insurance rates for international shipping. All of that causes a disruption to the supply chain."
And who will bear the brunt of those costs?
"There is only one person who ever pays, and that's the consumer," said Forgione. "Retailers in the U.K., when the Houthi attacks first started, said that they would try and absorb as much of that cost as possible. But what we saw was the rate for shipping containers increased dramatically."
Forgione said there are three possible outcomes: the price of goods will increase; "shrinkflation" will occur where the price remains the same, but the amount of product reduces; or the stock will simply reduce, "which in itself has an inflationary cost effect."
More supply chain issues on the horizon
At the Tea People plant in Reading, England, Vishaka Agarwal raked her hand through a drum of tumbling loose leaf tea, bringing mounds of zesty dried leaves to her nose.
"It's good," she said, before signing a nearby clipboard, confirming that batch of Earl Grey tea was ready for packaging.
Vishaka, 45, and her husband Neeraj, 51, co-founded Tea People in 2013. A social enterprise, Tea People processes, packages and sells tea internationally, using "business as a medium to alleviate poverty in tea-growing regions," according to its website.
Both originally from Darjeeling, India, home to "the champagne of tea," Neeraj and Vishaka said shipments that used to take five to six weeks are now taking twice as long.
"There were some teas which we expected before Christmas, and we are still waiting for that," said Neeraj. "The cost has increased, as well, but not to the extent it did during COVID time."
So far, Neeraj said they have managed to avoid passing that cost on to their customers, some of whom have gotten in touch, keen to ensure their favourite "cuppa" wouldn't be running dry anytime soon.
One of the strategies the Agarwals have been using is over-ordering inventory. In the past, they would have ordered a six months' supply, whereas now, they order enough to last nine months.
"We've tried our best to protect our customers and tried our best to not pass down cost," Vishaka said. "But at the end of the day, world politics will affect a business like ours, which is international."
Tea People also ships to Canada, which imported approximately 49,000 tonnes of tea in 2022, according to Statista.
Clever inventory management is a possible short-term solution to the tea problem, according to Forgione.
"But the disruption is unfortunately just going to get wider, broader, deeper over time. And I don't think we've seen the full extent of how Europe is going to be impacted by this."
Car manufacturers, clothing retailers and even the furniture giant Ikea have divulged similar delays, which highlights the fragility of today's supply chain, said Forgione.
"U.K. markets have to shift from a just-in-time, highly efficient supply chain to a much more sustainable and anti-fragile supply chain."
The Panama Canal is in the midst of a record-breaking drought that saw the rerouting of trade last year by Hapag-Lloyd. The major German shipper announced vessels would be redirected to the Red Sea for deliveries being made to Europe and the eastern seaboard of North America.
This was before the Houthi rebels began their attacks, forcing Hapag-Lloyd to reroute once more.
"What's happening with tea is just an early indication of what the future is going to be," said Forgione. "Not just for the U.K. and EU, but for global markets."
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