The public tea auctions is the main vehicle for the primary marketing of tea in India for over a century since the first tea auction centre was set up in Calcutta (Kolkata) in 1861.
The auctions have since changed from the manual outcry method to an e-auction system from 2009. However, it still remains the job of the auctioneer to taste, evaluate and sell teas to the highest bidder, either through the auctions or through private treaty.
In the auction process, auction organizers monitor the mechanism and liaise with the Tea Board of India. Sellers or producers give the authority for the marketing and auctioning of their teas to the appointed auctioneer, who then handles and controls the entire selling process.
Whilst there is a set of rules and norms set by the Tea Board and auction organizers to be followed by all stakeholders and only registered parties can operate, the job of the auctioneers is fairly substantial. The cataloguing of teas for auctions each week at various centers and the volumes being handled requires a great deal of work.
The system, which is the only organized method for sale of bulk tea in India, was conceptualized by what we now know as auctioneers’ way back in 1861, as mentioned earlier, with support from tea producers. So today’s buzzwords like transparency, competition and fair price discovery were already in place since then. This is a unique model and therefore cannot be compared to ‘middlemen’ or ‘brokers’ elsewhere. The auctions provide maximum exposure for all teas on offer and are the ideal way to sell large volumes efficiently. A wide variety of quality is made available on the spot as it were. Auctioneers are in constant communication with all stakeholders, ensuring a proper perspective of the industry. There is a wealth of talent present with the auctioneers that delivers solutions across all aspects of the trade. Their Judgment on quality, markets, pricing and sale of tea has wide acceptance. It is an integral part of the value chain. Prices realized for teas at the auctions has always been considered the ‘Price Barometer’ and accepted as the true price of tea. Until the introduction of the E-auctions, auctioneers also guaranteed payments to sellers.
In addition to managing documentation and logistics for the sale of tea each week, auctioneers provide services that include tasting, valuing, cataloguing, inspecting, sampling, billing/invoicing, issuing of delivery orders/intimation, deduction of taxes, to name a few. So whether it is sellers, buyers, warehouse keepers, banks or the Government; the auctioneers are the go-to people who handle and process everything.
Moreover, several add-on services are provided free of cost. Manufacturing advice to estates, Quality control and benchmarking, promotion of teas to domestic and international buyers, statistical information on production, markets and auction sales, training in tasting and evaluation and marketing of bulk tea, to name a few.
For the likes of small growers who may not have access to bank finance, auctioneers provide finance to bridge the gap and reduce their cash credit limit. Valuations of estates are also done and accepted by banks.
Professional, impartial and totally committed to the success and growth of the tea auctions and the industry, is what tea auctioneers are all about.