Extortion in wholesale markets: no relief in sight for tea consumers
November 17, 2012
MOHAMMAD BILAL TAHIR
There is no relief for consumers despite a substantial decline in tax rate on tea import because of a high incidence of extortion, market sources said here on Friday. According to major tea traders, the prevailing law and order situation is not only making the lives of the business community miserable, it is also creating problems for the common man.
According to market sources, extortionists were collecting Rs 1,500 ‘protection money’ with impunity on every tea bag, weighing 100 kilograms, causing the commodity price to remain unchanged.
Sources in the wholesale market told Business Recorder that the prevalence of extortion culture had also affected tea prices. “I pay between Rs 1,000 and Rs 1,500 on each 100kg bag of tea to extortionists backed by various criminal groups,” said a tea dealer, adding that law and order situation in the city had hit the traders hard, which in turn severely affected end consumers.
According to him, wholesalers were unable to sell their products at actual rates. He alleged that local police were also ‘patronising’ extortionist elements. Traders, sources contended, paid nearly Rs 30 million a day to extortionists and other criminal elements, adding that police had failed to control extortionists and provide an enabling environment for doing business in the city.
Packers and blenders said that despite a substantial cut in tax rates, tea import has significantly declined in the wake of lawlessness and prevalence of extortion in wholesale markets. Pakistan, ranked third among tea importing nations, is among leading tea consumers in the world, trailing behind the United Kingdom and Russian Federation. Sources said that the domestic tea industry was currently under pressure after an increase in Kenyan tea prices over the past two to three months. Total tea consumption in the country ranges between 200,000 and 225,000 tons.