Doing ethical business overseas
CASE STUDY
Dilmah
More than two decades ago, a tea producer from Sri Lanka debuted his 100 percent Ceylon tea in Australia. Today, Dilmah, founded by Merrill J Fernando, is the second largest company in the black tea market, exporting to more than 90 countries worldwide.
In the 1950s, Fernando dreamt of having his own tea brand and set off to learn about producing, packing and marketing tea products. To his horror, he came to the industry at a time when multinationals were putting small tea brands out of business, with subsequent negative effects on production.
“The three or four big traders weakened the industry because they had buying power. I watched producers lose money on their crops and workers sharing that fate,” he recalls.
To make matters worse, he saw the tea of his homeland blended with inferior tea and inaccurately marketed as pure Ceylon tea. So, although disheartened by the power of the big brands, he saw the niche for single origin 100 percent Ceylon tea that would be grown and packed in Sri Lanka to enable the community to retain the benefits of the business.
Named after his sons Dilhan and Malik, Dilmah became Fernando’s “third child”. It was the world’s first fair trade tea where a producer could retain the profits from selling the product more or less directly to the consumer.
Fernando chose to debut the brand in Australia because he “knew Australians gave a fair break to the underdog”. Lacking funds to pay a celebrity to promote the brand, he fronted the camera himself, declaring his passion for Ceylon tea and closing with the now-famous line: ‘Do try it.’ Little did he know that that would be a refreshing change from the faceless multinational tea brands, popularity that this year led to the celebration of Dilmah’s 21st anniversary in Australia.
Despite its size, Dilmah has not forgotten the ethical premise of its beginnings. Earnings from global sales still go to the tea plantations where the tea is grown and packed, reinvested into the business and community. Dilmah workers enjoy healthcare and childcare services, while their children of school age have access to educational facilities.
Fernando’s son Dilhan adds that beyond the business side of Dilmah, the brand maintains the MJF Charitable Foundation, which sponsors community initiatives, including building schools and funding local reconstruction following the 2004 Indian Ocean tsunami, and provides microfinance to aid small businesses.
“It is an obligation, not an option, for every business to be a matter of human service. Every corporate is made up of normal people and it is being human to care for your neighbours,” he says. “The philosophy of business as a matter of human service needs cooperation and involvement from everyone, from the consumer to the retailers, to the media, to everyone in that chain, including our own representatives.”
Adds Fernando senior: “Everyone is a shareholder in my tea.”
—Find out more about Dilmah at www.dilmahtea.com and the MJF Charitable Foundation at www.mjffoundation.org
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