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Viewing cable 07BAMAKO70, ALL THE TEA IN MALI; A LOOK AT CHINESE ECONOMIC

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Reference ID Created Released Classification Origin
07BAMAKO70 2007-01-23 10:44 2011-08-25 00:00 UNCLASSIFIED Embassy Bamako
VZCZCXRO5520
RR RUEHMA RUEHPA
DE RUEHBP #0070/01 0231044
ZNR UUUUU ZZH
R 231044Z JAN 07
FM AMEMBASSY BAMAKO
TO RUEHC/SECSTATE WASHDC 6751
INFO RUEHZK/ECOWAS COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0007
RHMFISS/HQ USEUCOM VAIHINGEN GE
RUEAIIA/CIA WASHDC
RUEHLMC/MCC WASHINGTON DC 0029
UNCLAS SECTION 01 OF 02 BAMAKO 000070 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ETRD ECON EAGR ML
SUBJECT: ALL THE TEA IN MALI; A LOOK AT CHINESE ECONOMIC 
EXPANSION IN AFRICA 
 
BAMAKO 00000070  001.2 OF 002 
 
 
1.  Summary: Chinese tea imports have captured nearly the 
entire Malian market in just one generation, replacing prior 
sources and trade routes that existed for several centuries. 
In a story line that reveals much about China's emerging 
dominance in consumer goods in Africa, Chinese traders helped 
identify a market niche by developing identifiable brands, 
assuring consistent quality and supply, and providing various 
packaging options; Malians distributed the product to 
retailers throughout the country.  Most Malians drink tea 
several times a day.  While competition among Malian 
importers for market share is fierce, in the end all the tea 
comes from China.  End Summary. 
 
2.  Few rituals in Mali compare with the consumption of tea. 
A tradition tracing its origins to the Tuareg and Arab nomads 
of Northern Mali, the custom spread south in colonial times. 
Now, nearly every Malian regardless of age and social class 
participates in the thrice-daily ritual of preparing and 
drinking a thick blend of green tea and sugar.  Curiously, 
Chinese agronomists helped spur the trend by establishing a 
local tea-growing cooperative in the late 1960's, in 
competition (at the time) with traditional caravans that 
imported tea from the Middle East.  As demand outstripped 
local capacity, Chinese traders stepped in to help Malian 
entrepreneurs supply the market with Chinese imports. 
 
3.  One such entrepreneur, Boubacar Tandia, who claims  15 
percent of the multi-million dollar tea market, started 
importing tea in 2002, after "customs reforms" initiated in 
Ouagadougou eliminated his primary business of importing 
electronic goods through Mali to Burkina Faso.  Chinese 
traders introduced him to an agent from a Chinese parastatal, 
who suggested he break into the tea sector and invited him to 
Beijing to develop a marketing plan.  Tandia first visited 
Malian customs as the only reliable (if strictly informal) 
source of import data.  Officials there told him they 
estimated Chinese imports of tea that year at 7 billion CFA 
(14 million dollars). 
 
4.  In Beijing, the parastatal and Tandia selected a specific 
blend, developed a brand ("Elephant"), and decided on package 
sizes appropriate for resale in small kiosks and market 
stalls.  Tandia says he put the money up front for the first 
40 foot container to Mali, as credit was not provided by the 
Chinese. 
 
5.  Tandia claims "Elephant" was a market leader until the 
civil war in Cote d'Ivoire cut access between the port of 
Abidjan and Mali for six months; by the time the roads 
reopened, brands sold by others had taken over (one brand, 
"Lobo," is named for Malian President Toure's wife).  Tandia 
went back to China and developed two additional brands, "Le 
Nord" and "Tuareg," with labels and promotional materials 
invoking images of Mali's nomadic north.  Tandia claims the 
blends were even selected for taste by a Tuareg friend to 
assure authenticity.  Tandia now claims he controls 15 
percent of Mali's multi-million dollar tea market, which he 
predicts will grow based on the quality of his product. 
 
6.  Comment: Tandia's experiences explain briefly how China 
has come to dominate the market in consumer goods in West 
Africa: 
 
--Low Price: Chinese goods are immediately affordable, unlike 
bargain-priced Western goods (or Chinese goods made to 
Western specs), which are still beyond the price range of the 
typical Malian consumer.  Chinese motor bikes for instance, 
with a price of around 500 dollars, have driven comparable 
Japanese or French models (unavailable locally for less than 
2000 dollars), out of the local market. 
 
--Local distribution: Chinese traders sell directly to Malian 
middlemen, who then distribute the goods through small shops 
and street vendors.  In contrast, Lebanese and French traders 
frequently control the retail segment as well, leaving out 
local wholesalers. 
 
--"Value Added" takes place in China as much as possible 
before shipment:  Goods manufactured in China take advantage 
of lower input costs and econoies of scale, allowing them to 
enter the market t a lower price than locally manufactured 
goods. Ironically, many of the local manufacturers are aso 
Chinese-Malian Partnerships set up in previou decades. 
 
--Local Chinese Facilitate commerce:  The permanent and 
significant presence of Chinese traders provides critical 
contacts and opportunities for Malians previously closed out 
by Lebanese or other business interests. 
 
BAMAKO 00000070  002.2 OF 002 
 
 
 
--Quality still an issue:  Chinese goods have a poor 
reputation for quality and thus many are deliberately 
manufactured to indicate another country of origin.  Chinese 
tea has a excellent reputation, however, and now has a 
complete lock on the market for Mali's centuries old 
tradition. 
MCCULLEY