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Nepal spoils Darjeeling's tea party

Nepalese workers pick tea leaves at the Jun Chiyabari estate in Dhankuta, Eastern Nepal. (Photo courtesy of Niraj Lama)

SILIGURI, Darjeeling, India -- Two years ago, when Niraj Lama began stocking an unknown tea from Nepal at Happy Earth Tea, his family's tea importing company in New York, it was with some trepidation.

Jun Chiyabari Himalayan Autumn Bouquet, a light tea with notes of hay, honey and apples, came from a tiny Nepalese tea-growing garden with a history dating to only 2001. But at $10 an ounce (a little over 28 grams) it had a price tag "matching the premium Taiwan oolongs and only a few [of the] best Darjeelings."

Lama need not have worried. "In the Western market people are always looking for something new and exotic, and in that Nepal has evoked quite a bit of excitement," he said. "People who once swore by Darjeeling have now been coming back for more of the Nepal tea, undeterred by its price."

Nepal tea, a black variety once so unknown that it was regularly passed off as the more famous Darjeeling, from neighboring India, is coming into its own. Growers are making concerted efforts to market it, and Nepal's Department of Industry last year registered a collective trademark -- "Nepal Tea Quality from the Himalayas" -- for use on packets.

Nepal's success is deeply worrying for the Darjeeling tea industry, which is already struggling with a number of issues, including the mounting costs of running expensive traditionally-structured tea plantations, also known as estates, and a clandestine influx of cheaper Nepal teas across the border for use in blends branded as Darjeeling.

Lama -- who was born in Darjeeling and initially set out to promote Darjeeling tea through his business -- sells a range of expensive "high-end" Nepal teas in addition to premium Darjeeling, shipping the teas to countries as far away as Germany. "Nepal tea is gaining recognition, especially in the specialty tea segment, in the U.S. and also outside," he said.

Prices are going up too. "Broadly speaking, a 100% appreciation in prices during the last two years for Nepal hill teas will not be an exaggeration," said Rajiv Lochan, CEO of Lochan Tea, a Siliguri-based company that markets Nepal, Darjeeling and Chinese teas globally.

For years, tea grown in Nepal was often passed off as Darjeeling. Both are produced in the Himalayas, and orthodox Nepal tea has the same characteristics as Darjeeling in terms of flavor and aroma. Asked to run a blind taste test, Swaraj K. Banerjee, chairman of Makaibari Tea Estate, said no one would be able to distinguish between, for example, a high-quality tea from Ilam -- one of Nepal's main tea-growing regions -- and a tea from Darjeeling.

Open border

As a result, Nepal tea has been ending up in teacups under the Darjeeling name, both in India's domestic market and globally. Thanks to a 1950 treaty that allows free movement of people and goods between the two countries, tea from Nepal crosses into the neighboring Darjeeling district without much difficulty, where it is blended, labeled and resold.

Taking a lead from traders and exporters, many Darjeeling tea growers surreptitiously procure tea leaves from Nepal and pass them off as their own. At one point in the last decade, it was commonly thought that while less than 10 million kilograms of tea a year was produced in Darjeeling, 40 million kg were sold under the Darjeeling name.

In 2005, Darjeeling was named India's first Geographical Indication, an official tag denoting tea produced in the 87 gardens where it grown in Darjeeling. India's motivation was to ensure that, just as there can be no Indian Scotch whisky, there cannot be a Nepalese Darjeeling tea.

The Tea Board of India, a government agency that is the custodian of the Darjeeling logo and protector of the geographical indication, has won some cases abroad regarding the misuse of the Darjeeling brand name, although reining in homegrown culprits has not been so easy.

Mislabeling is likely to decline now that tea from Nepal is becoming marketable in its own right. But the growing success of the Himalayan brand is worrying Darjeeling even though Nepal's annual production of orthodox tea, at 4.9 million kg in the 2013-2014 fiscal year, according to the latest figures from Nepal's National Tea and Coffee Development Board, was much smaller than Darjeeling's 8.9 million kg in the same period.

As sales rise, Nepal's reputation among tea critics is climbing. Nepali Tea Traders' Himalayan Golden brand was rated the world's best black tea in the 2014 North American Tea Championship class for fall hot teas. "The only thing we lack is a brand image," said Seshkanta Gautam, executive director of the development board. "We are now planning to launch an aggressive marketing plan for Nepal Tea."

That will include an application for geographic indication, once a law establishing a similar system to India's is approved. "Once the GI Act is approved, we will procure GI for Nepal Tea as well," Gautam said.

Unsustainable practices

Independent commentators have forecast further success for Nepal tea at the expense of more established brands, in part because of its proliferation of small growers. "That small mountain country is the future," wrote Geoffrey F. Norman, a well-known tea blogger and reviewer, in his blog "Steep Stories" on Jan. 25.

"The old plantation model is dying," said Norman, referring to tea-producing areas in Sri Lanka, India, Indonesia and Africa where tea is grown on large integrated estates. "Enjoy what heydays you have left because the glory days of the 'estate' are just about done," he added. "The problem ... is that the sheer logistics of the old model aren't sustainable. Some of the practices are a century old -- totally not feasible in today's world."

The costs of running such plantations are high, in part because owners generally provide schools, hospitals and food for the laborers who work on the estates. Plantations are also out of favor in the tea consuming countries of the West, where they are increasingly seen as exploitative.

Nepal tea is mostly grown by small farmers, and the tea bushes are typically younger, giving higher yields. This makes it cheaper to produce than Darjeeling -- a feature that is attractive for the traders and fast moving consumer goods companies who blend and package it, either legally (as Himalayan or Nepal tea) or illegally (as Darjeeling).

"Even the India-based FMCG companies, the big buyers, are forsaking Darjeeling and opting for the cheaper Nepal teas instead of Darjeeling for their blends, adding to the woes of the Darjeeling tea sector," said Shiv Saria, a director of Soongachi Tea Industries, an Indian manufacturer and exporter.

Saria said he was concerned that untested Nepal tea was flooding into India at the expense of Darjeeling, which is subjected to rigorous scrutiny. "The Tea Board of India should ensure that all teas from Nepal comply with India's Plant Protection Code before entering India," he said. The code is a set of guidelines, published on Jan. 1, 2015, to regulate the use of chemical pesticides.

Sandeep Mukherjee, secretary of the Darjeeling Tea Association, declined to be interviewed. S.S. Bagaria, the association's president, did not answer phone calls or reply to text messages. However, the Tea Board of India announced in March that it planned to start testing Nepal tea samples at border crossings in accordance with the code and the standards set by the Food Safety and Standards Authority of India.

Premium teas from Nepal command high prices at Happy Earth Tea in New York.

Some see room for cooperation rather than competition between the dueling tea regions. "Nepal tea has a great future and it will benefit from cooperating with Darjeeling along the lines of [the] Fujian-Taiwan Cross Straits Tea Association," said Lochan, referring to tea growing areas of Taiwan and China.

Back at Happy Earth Tea in New York, Lama said that a quarter of his tea selection was now from Nepal, and the proportion was steadily increasing. This year he bought an early spring tea from Nepal that is retailing at $16 an ounce.

"The truth is the tea is truly sublime and people are absolutely blown away by it. So they don't mind the price," he said. "Nepal really doesn't need to hang by the coattails of Darjeeling anymore."

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