Sri Lanka’s tea industry is drawing a hard line over billions of rupees held in its Tea Promotion and Marketing Fund, warning that any attempt by the Treasury to divert the money into state coffers could trigger an immediate demand to abolish the levy that finances it.
The confrontation comes as the government navigates severe fiscal constraints under its economic recovery programme and IMF-backed fiscal tightening. For the tea industry, however, the Promotion Fund is not viewed as a conventional government reserve. Exporters argue that it was created specifically to finance the international promotion of Ceylon Tea and is funded directly by the industry through a statutory levy.
Exporters pay Rs. 3.50 for every kilogram of tea shipped overseas into the Tea Promotion and Marketing Levy. Over the years, those collections have helped build a fund estimated historically at between Rs. 4 billion and more than Rs. 9 billion, although the precise current balance is closely guarded amid continuing legal and political concerns.
The dispute exposes a fundamental contradiction in Sri Lanka’s economic crisis. While the Treasury is under pressure to mobilise every possible financial resource, the tea industry insists that promotional reserves are essential to maintaining the country’s position in highly competitive international markets.
The fund is legally administered by the Sri Lanka Tea Board on behalf of the industry, with its mandate centred on promoting the Ceylon Tea brand. International campaigns have targeted important markets including Russia, Ukraine and Japan. Industry representatives fear that transferring the accumulated money to the Treasury would weaken the very export engine that generates the foreign exchange the country desperately needs.
The stakes are considerable. Tea remains a roughly US$1.5 billion annual export industry supporting an estimated 2.4 million livelihoods. Yet producers and exporters are simultaneously confronting high energy costs and shipping disruptions linked to the continuing Middle East conflict, which has affected routes serving markets that traditionally absorb a substantial share of Ceylon Tea exports.
The government has already demonstrated that it can intervene in the sector without accessing the Promotion Fund. It recently provided Rs. 2.5 billion in fertilizer assistance and an additional Rs. 5,000 relief package for smallholder farmers, measures intended to protect the 2026 production target of 300 million kilograms.
That approach, however, leaves a bigger question unanswered: if the state can fund emergency production support separately, why should an industry-financed promotional reserve be redirected to cover broader fiscal pressures?
The answer could determine more than the fate of several billion rupees. It could shape who controls Sri Lanka’s tea future the Treasury, or the industry that built the fund in the first place.