"Queen of tea" losing crown amid frugality drive

HANGZHOU - Although spring is the main season for tea harvesting and sales, farmers near West Lake have been feeling a chill this year following China's frugality and anti-corruption campaigns.

Few customers are buying high-end tea, in sharp contrast to previous years, at Longjing Village, a major production base for West Lake Longjing tea.

"Buyers are only offering us between 5,000 yuan ($805.5) and 5,600 yuan per kilo, a third lower compared with last year," said a farmer surnamed Jiang. Prices reached as much as 16,000 yuan per kilo in 2012.

Dubbed "queen of green tea", West Lake Longjing is produced in Hangzhou, East China's Zhejiang Province, and represents one of the most famous teas in the country, with 370 million drinkers.

However, national campaigns since late 2012 banning officials from accepting gifts or buying extravagant goods with public money have impacted the high-end tea industry.

A villager surnamed Qian said a government bureau in the province used to order 10 kilos of high-end tea every year. "This year, for the first time, they have canceled their order."

The Spring Festival and Tomb-sweeping Day, which falls on Saturday this year, are usually peak sales periods for West Lake Longjing tea. Not this year.

Local gift shop owner Du Qiaohong has not sold a single box of high-end Longjing tea since before the Spring Festival in January.

"Few people buy them as gifts now," said Du, who plans to close the gift shop.

Tea leaf dealers have also witnessed a slump. Lu Jiangmei, chairwoman of Hangzhou Zhenghao Tea Leaf Co, Ltd, said unlike previous years, when "major clients" from across the country ordered 70 percent of their high-end teas, the company has decided to control purchases to prevent excessive inventory.

"If the tea is not sold this year, it will be worthless next year when new tea leaves are harvested," she said.

The company is one of the largest dealers of Longjing tea, with 30,000 kilos of tea leaves sold last year. About one sixth of the volume was high-end tea, according to Lu.

To boost sales, she said the company was looking into online trade and selling at lower prices.

Communist Party of China (CPC) leaders introduced an eight-point rule a month after they were elected in November 2012 to fight against corruption and bureaucracy. The ongoing campaign requires officials to condense meetings, reduce ceremonies and exercise thrift. Another regulation in January 2013, before the Spring Festival that year, bans officials from giving and accepting gifts, tours and banquets with the use of public cash.

Such rules started affecting high-end tea sales last year, and a series of corruption cases have further deterred officials from violating rules this year, said Yu Bohong, a commentator and observer on social issues.

Zhang Yufu, manager of a tea auction company, said the frugality rules have meant the price of high-end Longjing tea has come down to a reasonable level, which was actually good for the development of the industry.

Zhang said West Lake Longjing tea was auctioned at 360,000 yuan per kilo in 2012, 24,000 yuan higher than the price of gold at the time. Last year the tea was auctioned at between 6,000 and 14,000 yuan per kilo, and is likely to go down further this year.

Qi Guowei, who owns West Lake Longjing brand "Gong" said, "With tea as our national drink, we don't want West Lake Longjing tea to be a privilege for the few. Instead, we hope it's in the tea cups of ordinary people."