Unilever aims to sell the sustainable teas at the same price as its regular tea.

Unilever aims to sell the sustainable teas at the same price as its regular tea.

The world's largest tea company, Unilever, which makes PG Tips and Lipton, is on a mission - to transform the tea industry by making it sustainable, changing the lives of the workers for the better along the way.

New Zealanders are big tea drinkers, but how many of us give a thought to where it comes from?

The global tea industry is beset with problems. While most commodities are soaring in price, the price of tea has plummeted 35 per cent in the past 25 years, and continues to drop year on year.

This is down to supply exceeding demand by 1 to 3 per cent per year as more growers, particularly small farmers, enter the market, while improved farming methods lead to greater yields.

In Kenya, the largest tea exporting country, the farmers' problems are exacerbated by wage inflation in a heavily unionised industry, the strong Kenyan schilling, and poor infrastructure.

To address these issues, Unilever, which buys 12 per cent of the world's black tea and sells the finished product in 130 countries, has committed itself to introducing sustainably certified tea across its brands - its pledge is to have all of its Lipton Yellow Label and PG Tips bags sold in Western Europe certified by 2010, and all Lipton tea bags sold globally certified by 2015.

Certified tea should command a greater price at auction - 10 to 15 per cent higher - and Unilever estimates it will be paying farmers €2 million ($3.76 million) more for its tea by 2010 and €5 million more by 2015.

Unilever's chief executive, Patrick Cescau, said: "It will not be achieved overnight, but we are committed to doing it, because we believe it is the right thing to do for people who drink our tea, the people along the entire length of our supply chain, and for our business."

But how does this work in practice? The consumer goods giant has begun by getting its own tea plantation in Kericho, in the Rift Valley in south-west Kenya, certified independently by the Rainforest Alliance. The plantation stretches over 8100ha of lush fields, and at an altitude of more than 2000m, and with rains brought across from Lake Victoria, it is at the heart of Kenya's tea industry. Employing 18,000 people and supporting 80,000 dependants through schools and hospitals, it meets 20 per cent of the needs of Unilever's tea production. The rest is bought in from estates around the world, while 10 per cent of the Kenya business is supplied by small farmers.

Getting its own plantation certified did not prove too difficult, as Unilever had been practising sustainability for decades. Sustainable development is defined as "development that meets the needs of the present without compromising the ability of future generations to meet their own". Richard Fairburn, chief executive of Unilever's Kenyan tea operations, said that in practice in Kericho this includes using energy from renewable sources, such as hydro power, planting eucalyptus trees which are used to fire boilers, ensuring the welfare of the workers and their families through free education and HIV awareness programmes, and teaching smallholders how to farm more efficiently by reducing inputs but getting better quality yields, by looking after water supply and preventing soil erosion.