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Lipton offloads tea estates in Kenya, Rwanda and Tanzania to Browns

Lipton has agreed to a long-term partnership with Browns Investments, which will result in the transfer of Lipton's tea estates in Kenya, Rwanda and Tanzania. Under the agreement, all tea sold by Sri Lankan company Browns will be grown and harvested to a new set of standards covering quality, social and environmental protections. The partnership will see Browns become one of the world’s largest tea exporters – around 87 million kilograms annually – as well as on of Lipton’s largest tea suppliers. The companies expect the partnership to raise tea quality globally and to accelerate the application of responsible farming methods across the industry to drive sustainable growth. The new quality, social and environmental standards include the introduction of a scorecard-based approach that recognises tangible progress by producers and encourages rapid and meaningful action. Browns has introduced initiatives on its existing Sri Lanka and Kenyan estates, such as factory modernisation and crop diversification in support of biodiversity and has also committed to maintaining and extending all environmental and social practices already in place on the Lipton estates. Through the deal, Browns will invest in its estates in Kenya and Sri Lanka to meet the new standards by 2025, as well as creating additional skilled employment opportunities in Kenya. Lipton has pledged to reinvest the proceeds of the partnership into the East Africa region to boost local and industry-wide progress in areas such as skills development and climate change mitigation. Further funding in education will expand the reach of the Lipton Tea Innovation & Technology Academy in Kabianga, Kenya, which provides vocational training as well as bachelor’s, master’s and PhD level courses to develop tea cultivation, harvesting and processing. Additional funding will allow for extra programmes, more student places, and the digitisation of the curriculum to provide online learning to maximise accessibility and impact. Other initiatives include Lipton’s development of a self-sustaining ecosystem for green and/or low nitrogen fertilisers in the region, enabling a step-change in the finances of growers as fertiliser is typically among the highest costs of production. The Government of Kenya has supported the companies in identifying opportunities for local communities to benefit from the partnership. Discounted shares totalling 15% of the main Kenyan operating company will be offered to the communities where the estates are situated, to create accessible communal equity and mutually aligned economic participation. Additionally, Browns will pay an above-market premium to Kenyan smallholders to produce superior quality tea, offering double what farmers would previously have received. This is set to incentivise a shift from quantity to quality while securing a substantial uplift in farmers’ livelihoods. Furthermore, Lipton and Browns are creating a Community Welfare Trust with an initial KES 1 billion (approx. $7.53 million) dedicated to helping address other needs of local and neighbouring communities. Lipton Teas and Infusions’ CEO Nathalie Roos said: “Browns is the perfect partner, with the credibility, capabilities and scale, to work with us to raise standards in the whole tea industry. The team’s commitment to sustainability and community development aligns with our own. Together, we are setting a new precedent for transforming the global tea market – one cup at a time.” Kamantha Amarasekera, chief executive director of Browns Investments, commented: “We look forward to working hand-in-hand with Lipton Teas and Infusions and local partners to foster a sustainable, responsible and prosperous future for all. This partnership marks a significant step towards elevating the industry as a whole, while also ensuring a positive impact on the livelihoods of the communities we serve.” Terms of the transaction, which is subject to standard regulatory clearances, were not disclosed.

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