The auction system originated at the very dawn of the tea trade and, though computerized and streamlined today, has proven a fool-proof yet simple system that has clearly withstood the test of time. From the early 1700â€™s, Englandâ€™s tea imports were sold at auction at East India House in London. In 1834, when the Honorable East India Company lost its monopoly on tea, the tea auction was moved to Mincing Lane, which thereupon became the center of the international tea trade and remained so for the century that followed. The first invoice of India-produced tea–just eight chests–was auctioned in Mincing Lane in 1839. By 1861, India was producing enough tea to support an auction in Calcutta. Today, at least 75 percent of Indiaâ€™s vast tea production, hundreds of millions of kilograms from over 12,000 tea estates, is sold through her five auction centers.
A tea estateâ€™s production is packed and shipped exactly as it is made–by the batch. (CTC is also packed and sold, though not made, by the batch.) Each batch, or lot, no matter how few or how many chests, is called an â€œinvoiceâ€ and is traceable throughout its commercial existence, from factory to retailer, by the invoice number. Invoices of Black tea, whether produced in Sri Lanka, Java, Kenya, India or elsewhere outside China, are usually sent to auction centers for sale through appointed brokers. Each invoice is inspected to assure that it matches what it purports to be in weight and description. Selling brokers distribute â€œtrade samplesâ€ to prospective buyers–mostly other brokers–and catalog each invoice for sale at auction, which is always held on appointed days starting early in the morning.
Auctions usually take an entire day and often spill over into the next, depending on the amount of tea to be sold. Only brokers registered with the Auction Association are allowed to buy and sell. Bidding begins as soon as the auctioneer announces the invoice number of the lot of tea to be sold; the moment it is â€œknocked downâ€ to the highest bidder the sale is binding on both seller and buyer. Also sacrosanct is the â€œPrompt Dateâ€ on which the payment is due, precisely 14 days after the transaction.
Auction centers have been founded in almost every Black tea producing region or country. Calcutta (India) 1861; Colombo (Sri Lanka) 1883; Cochin (India) 1947; Gauhati (India) 1947; Chittagong (Bangladesh) 1947; Mombasa (Kenya) 1956; Limbe (Malawi) 1970; Jakarta (Indonesia) 1972; Coonoor (India) 1990; Coimbatore (India) 1995. The historic London tea auctions, first held in 1679, were discontinued in 1998.
This is an excerpt from Chapter 12, called “Auctioning” from JNP’s forthcoming book “All About Black Tea: For those who have given tea a thought but not a try”