LAHORE – The growing illicit tea trade is causing huge economic losses to Pakistan besides posing a serious threat to human health.
Pakistan’s annual tea consumption exceeds 200,000 tons. The legal tea industry caters to 70% of the requirements while the remaining share belongs to the illicit market. Tapal Tea has the largest market share at 29.6% followed by Lipton Pakistan which holds an 18% market share.
As per estimates, the illegal tea trade is causing an annual revenue loss of approximately Rs 10 billion due to the avoidance of import duties and taxes.
High taxes and tariffs on legally imported tea make smuggled tea a more attractive option. The price difference between legal and illegal tea becomes a strong incentive for consumers to opt for the latter.
Pakistan’s persistently high inflation rate has reduced consumer purchasing power. With the cost of living on the rise, many consumers turn to the black market for cheaper alternatives, despite the potential health risks involved. The smuggled tea often undergoes adulteration with harmful dyes, sawdust, and even pigeon blood. These unsafe practices in the informal sector pose significant health hazards to consumers.
Osama Siddiqui, a macroeconomic analyst, has stressed the need to take measures at the government and individual levels to increase revenue and save public health. He urged adopting a multi-faceted approach, including stricter enforcement of import regulations, public awareness campaigns about the dangers of smuggled tea, and efforts to make legally imported tea more affordable through policy adjustments.
