Fall, 1998 Newsletter - "London's Last Tea Auction"
Celebrating London's Last Tea Auction, July 29, 1998
Tea in 17th Century London
By some accounts, tea was consumed by Englishmen who traveled to Japan and China as early as 1615. By the middle of the century, a limited supply of tea was making its way to England on trading ships loaded with silk and spices. The first public sale of tea in England was by Thomas Garway who sold tea in his coffee house as a novelty item as early as September, 1658. Twenty years later tea was publicly sold in the London auction market as a commercial product. It could be stated that this was the official launching of the great British Tea Empire.
The first recorded tea auction in London was conducted by the English East India Company on March 11, 1679. With the exception of some smuggling by independent entrepreneurs and foreign companies, the East India Company held a monopoly on all tea trade within the extended British Empire until April, 1834. It was the East India Company that initially established the British tea market, but it was the free commerce which followed their monopoly that fully developed and exploited the market for the world's most popular beverage.
The ebb and flow of the formidable British Empire has been slanted toward ebb in recent decades, but eras do not end in an instant. The gradual contraction of the British Empire is marked by a few landmark events which are monumental, such as the return of Hong Kong to China's jurisdiction after ninety-nine years of British administration. Other events can be even more symbolic but pass nearly unnoticed due to their limited impact. One such symbolic, barely noticed event was the last London Tea Auction held at the London Chamber of Commerce and Industry on June 29, 1998. It was an event that interested very few people - even those in the tea industry.
The End of an Era - The Last London Tea Auction
I first read about the demise of the auctions in an article posted on the internet. After a moment's reflection, I decided I would make a special effort to attend this auction with the primary objective of purchasing tea for sale through the Upton Tea Quarterly.
I learned through our London tea brokers that the auction would not be restricted, and anyone could attend on a first-come, first-served basis. This brokerage firm is a small company, but it has been involved in the tea trade for over a century. The principals of the company would certainly be attending the auction, and I was invited to attend as their guest. The event was to start at 10:30 a.m.; we would meet at 9:30 a.m. and likely have no problem being admitted. I arrived just before 9:00 to assure admission. Once my hosts arrived, I expressed my interest in buying one of the best teas from the auction and asked their assistance.
Although only registered brokers could bid during the official auction, there would be a charity auction afterwards that was open to everyone. I was intent on securing tea from the official auction, so I pressed for information on the quality and estimated prices of the teas being offered. My hosts had tasted all of the teas being offered and were well versed on London Auction prices. They were going to bid on a number of teas, especially one lot of Ceylon tea from the Mooloya Estate which was singled out as the best on the docket and quite suitable for self-drinking rather than for blending. Their ceiling for this tea was adequate to secure the tea under normal circumstances, but did not allow for aggressive bidding if others perceived the tea as historically significant. If their bid captured the tea, it would be offered to me at a fair price which would include their very reasonable mark-up.
The lot was fairly large, consisting of twenty sacks at 46 kilograms each. If the bidding exceeded my hosts' limit, someone could walk away with the best tea of London's last tea auction for perhaps a couple of pence extra per kilogram. I had come to the London Auction with the primary objective of purchasing tea from this historic event. Nobody could predict the extent to which these teas would be coveted. I urged my host to raise his limit by at least a factor of four and agreed to buy the entire lot if the bidding exceeded their original limit. The actual value of tea from this historic auction was hard to estimate, but I perceived it as an opportunity that would never recur.
The starting time was delayed until 11:00. The auction room was staged for much larger than normal attendance, with several rows of tables and chairs in the front of the room and another section of perhaps one hundred chairs in the back of the room. The first three rows were reserved for registered buyers. By arriving early, my hosts and I were able to sit in the fourth row. The room filled to capacity and beyond by the start of the auction. The media were in position with cameras pointed at the auctioneer. Nobody was predicting what would happen, but there was enough interest in the event for it to be well attended.
Bidding was rather uneventful during the regular auction. There were no surprises as each lot was knocked down at a price that showed no premium for the historical significance of this event. A few lots failed to receive their minimum bid and were pulled from the auction; it was business as usual. Was I the only one who considered these teas to be worth more than their everyday market price? When the lot I was hoping for came up for bid, there was a little more activity, but not enough to derail my objective. I got my tea at fair market value, without having to pay more than a shilling premium. Remarkable, I thought. This tea happened to sell for the highest price of all the teas offered at the formal auction, but that was no surprise. It was judged by some to be the best offered and it certainly should have commanded a good price. In fact it still sold for a fraction of the price I had paid a few days earlier for a top second-flush Darjeeling tea. This, in brief, is why the London Auctions were discontinued... but more on that later.
There were only seven lots remaining on the docket after my successful bid. The last of these was an ordinary Kenya PF.1 (Pekoe Fannings, destined for tea bags). It was a huge lot, typical of this sort of tea, and consisted of 60 sacks of tea, each weighing 55 kilograms. The entire 3.3 metric tons sold for £3,135 (approximately $5,200), which included the shipping cost from Kenya to London. Typically, a tea bag contains 2 to 2.25 grams of tea. Even at the more generous weight, the number of tea bags produced by this lot would be close to 1.5 million, at a cost of approximately one third of a cent per bag. Had I been in the tea bag business I would have treasured the opportunity to bid on this "last tea of London's last official tea auction."
When the official auction ended there was a brief break, followed by the charity auction. Teas for this event had been donated by various tea companies, and the proceeds were to be divided among The Sir Percival Griffiths Planters Trust, The Planters Benevolent Fund of Ceylon, and The Tea Trade Benevolent Society. Twenty lots were auctioned, including Darjeelings from Castleton and Margaret's Hope, a grade 2 China Keemun (Standard 1121), various Assams, some Kenya teas, and finally a single chest of Ceylon tea. My hosts had tasted the teas and concluded that there were some decent teas in the offerings. The Keemun was judged a bit old and nothing was exceptional.
Although I had obtained my objective of purchasing tea from London's last tea auction, the charity auction presented an opportunity to bid directly, along with everyone present, rather than going through a registered broker. As a result, the bidding was much more aggressive during this session; teas were quickly bid up to well beyond their true value. I could not tell whether it was a charitable twinge or simply the excitement of the open bidding that set the tone but it was clear that the teas from the charity auction were not going to be a bargain. Feeling more like an observer than a participant, my urge to bid was inevitably pre-empted by another, more extroverted bidder.
Bidding went quickly through the first eighteen lots. The nineteenth lot consisted of 5 chests of "golden, flowery, broken orange pekoe" tea, a Kenya GFBOP from the Milama Tea Estate. It was knocked down at £55 per kilogram, at least 10 times what the tea would normally command, but this would prove to be cheap compared to the closing lot. The twentieth lot was a single chest of Ceylon FP (flowery pekoe) from the Hellbodde Tea Estate. The bidding opened at £10 per kilogram. When the bidding reached £100 I glanced at the docket and performed some quick calculations. The tea had already reached the equivalent of $20.88 per 125 gram packet, or 38 cents per cup, and it was obvious that the end was nowhere in sight. I briefly steeled myself to bid but it was obvious that a bidding frenzy was mounting and that it was best to shift back into observer mode.
Once the bidding reached £225 per kilogram there were only two players left: Mr. John Leeder, representing Twinings of London, and Mr. Jonathan Wild, Chairman and Managing Director of Taylors of Harrogate. More than once the bidding war appeared to be over, but just before the third strike of the gavel, the stakes would once again be raised... accompanied by resounding support from the crowd of observers... until the final bid of £555 secured the tea for Taylors of Harrogate. Applause and enthusiastic shouts finally broke the tension. This is the highest price ever paid for tea at any auction. The 44 kilogram chest sold for over $40,000, equivalent to $2.10 per cup! I was delighted to be present for this monumental event and was especially pleased with my own purchase, which I now perceived as an incredible bargain.
Long Live the Tea Trade
The London Tea Auctions were once an icon of London commerce. William Ukers (All About Tea, Volume 1, published in 1933) says it best: The interest and excitement among landsmen during the clipper-ship days has been rivaled only by the Derby.... In Mincing Lane [where the tea auctions were held] the telegrams recording the hours at which the tea ships passed certain points were read with as much activity as present-day stock-ticker tapes.... Swarms of sampling clerks would descent upon the docks to draw samples for brokers and wholesalers as soon as the news came that the racers had passed Gravesend. Some spent the night at near-by hotels; others slept at the docks. By 9 A.M., the samples were being tasted in Mincing Lane. Then the bids were made by the large dealers; duty was paid on the gross weight, and by the following morning the new season's Congous would be on sale in Liverpool and Manchester.
In recent years the procedure has become much more efficient and much less romantic. Samples are sent by air courier to brokers and wholesalers directly from the tea estates. The best teas are usually purchased by fax prior to the auctions and shipped directly to the buyer. The better teas that remain unsold are auctioned in Calcutta. For the past few decades, only the lower priced commodity teas have been shipped to the London Auction. Turnout for the auction was lower each year and the teas often fetched prices below true market value. Air couriers and fax machines eliminated the need for the London Auction; waning attendance and low auction prices finally made them unprofitable. It was only a matter of time before they would cease to be.
Three centuries of British Tea were, in a quiet but memorable way, celebrated on June 29, 1998. Thanks to the spunk of Twinings of London and Taylors of Harrogate, the era of the great London Tea Auctions came to a close in the spirit of its former glory.
"Upton Tea Imports was founded in 1989 with the objective of providing the North American tea drinker with
the finest teas available. We purchase teas from reputable brokers and estates worldwide, dealing only with
sources who are capable of providing top quality teas. We sell directly to the consumer, thus ensuring the
freshest product and fairest pricing."