Sugath Kulatunga

Merrill Fernando the pioneer of branded teas and the creator of the internationally recognized Dilmah Tea is no more. With his demise there has been a number of articles of appreciation in the media. In his path of triumph, he had to face many problems both in the market and on the domestic supply side. His unique success is more striking when one recalls the not very friendly local scenario on tea production and promotion.

The Export Development Board (EDB) was proud to have been associated with Merrill in the difficult journey he travelled.  

The focus of the EDB was on value added forms of tea in packets and tea bags. At our request the ITC commissioned two experts in Tea marketing and promotion. If I remember Julian Hill had been the marketing manager of Brooke Bond in Europe. He made a comprehensive report stressing on the strategies to be adopted. His main thrust was that SL should have a target of converting 50 percent of tea exports to value added exports. The Tea Board was not happy with this recommendation and argued that the strength of our Tea is in the traditional form in bulk exports. Tea in bags is only for inferior teas. Hill pointed out that the growing market is in the tea bags and all major buyers demand for teas that can be used in tea bags i.e., C.T.C teas- Crush Tear and Curled. Even the private sector was not enamored in the new demand. Miss Thudugala, asst. director carried out a survey among exporters on their preference for CTC teas. I was amazed that the response was zero. When I discussed the tea industry response with Minister Athulathmudali he quipped ‘that is their Thottam mentality.

The parallel need was a new promotional strategy. I do not remember the name of the expert we got for this task. Among others he gave us two specific proposals. One was to have a new symbol and the other was to use a new film. On the symbol, he pointed out that the present symbol spotted the lion is an insult to the lion and does not make a strong impression on the customer. He produced an attractive heraldic’ lion as a new symbol. His main task was to produce a promotional film. He was quite impressed with the GFU film Song of Ceylon” by William Blake. He wrote a storyboard which was more a new version of Blake but highlighting the Tea Industry.

The reports of the two experts were sent to the Tea Board and the Ministry of Plantations. The Ministry convened several meetings to discuss these, and other matters related to Tea Promotions. These meeting were attended by the Chairman but I had to attend a crucial meeting as acting Chairman. I mentioned that EDB had supported 3 exporters to promote their company brands in three specific markets and invited the support of the tea Bd.to make these new ventures a success. I asked the Secretary why the Tea Board is not undertaking Brand promotion. The secretary gave a long explanation of the objects of the Tea Board and said that Brand promotion is not one of their objects. I remarked if that is the problem then the law must be changed. At this the Secretary seemed to be annoyed and asked me whether laws can be changed like that. I replied meekly that the EDB law took only 3 months from the cabinet paper of first approval, to the debate in Parliament. He obviously had not experienced junior officers questioning his explanations.

But what he said about the Tea Bd law lacking provision on brand promotion is correct. Tea Bd has 18 objectives and the only objective at least with the term marketing is subsection i) where Tea Bd. may

e) assist and encourage the marketing of tea in and outside Sri Lanka and to promote the demand for and the consumption of tea in the world markets.

Unless a specific provision is made to enable promotion of selected firms, inclusive of brand marketing it seems that Tea Bd cannot go beyond the provision in the sub section (e) of the objectives.

It must be conceded that under Minister Ranjan Wijeratne the Tea Bd made use of sub section (i) of the Objectives i.e.

to provide financial, advisory or other assistance to persons engaged in the growing or manufacture of tea- the Tea Board assisted tea factories to manufacture CTC teas.

For brand promotion, the EDB selected 3 firms for promotion in three specific markets i.e. Dilmah in Australia, Ferntea in the Emirates and another firm in the Scandinavian countries. In Scandinavia the immediate target market was Sweden where our exporter linked up with the Cooperatives which had a strong network of shops. EDB met the shipping cost of a large first consignment. The product was on display in the shop shelves and consumer interest was noted within a few days but suddenly all the products on display disappeared. The exporter did not suspect any foul play and the EDB met the cost of airfreight of a further lot. The same fate of the previous experience was repeated. The exporter made some investigations of the events and found that a Multinational firm was responsible for the villainy. The Scandinavian promotion was given up.

The Ferntea in the the Emirates had a different kind of problem.The state agency Conselexpo also had a joiny venture in the Emirates.  Both Ferntea and Conselexpo did not have staying power and faded out. By that time their most dynamic trader Harry Jayawardhane had left Conselexpo.

In contrast, Merrill was a toughie and prevailed against all obstacles. We admired his tenacity. He had unmatched expertise in both the product and the market. He was innovative, highly  motivated and not averse to risks. Other than the competition in the market he had to install in the country CTC and tea bagging machinery which was again a challenge. EDB helped him with these investments. If there was a tea exporter who could break into the highly competitive tea market it was Merrill.

It has to be mentioned that Chairman EDB Victor Santiapllai took an abiding personal interest in Merrill’s endeavor.

Merrill has set an example of brand promotion which leaders of export of other products like garments and spices should emulate.

Other than his entrepreneurial excellence he was a charming friend full of wit and humor. While wishing Merrill rests in peace I wish Dilmah tea and other ventures initiated by him every success