Posted in Reference
By the beginning of the eighteenth century tea drinking in Britain had gained enormously in popularity. Nevertheless, it remained an expensive drink, out of the reach of ordinary folk. There appear to have been two reasons for the high price; the East India Company enjoyed a complete monopoly on tea imports, so with an absence of competition it kept prices at a high level in order to maximise its profits. Secondly, requiring plenty of money in the coffers to finance their part in the War of the Spanish Succession, the government of the day levied a substantial tax on imports of tea.
As the old saying goes, 'Where there's a will, there's a way'- smugglers, always on the lookout for a profit, noticed the desire for tea being thwarted by prohibitive prices and stepped in to fill the gap. Their illegal and sometimes violent activity went unreported by the common people, who were only too happy to have the beverage of their choice made affordable. The East India Company itself was unwittingly responsible for some of the smuggling. Officers were allocated space aboard ship for private trade and some felt no compunction at using theirs for tea, which they subsequently sold on to smugglers.
Although the tax on tea was relaxed in 1745, the need to fund their part in the Seven Years War forced the government to implement another tax hike during the 1750s. By this point tea smuggling had become less amateurish and was instead a large scale, highly organised activity, employing thousands around the country. Lloyd's of London even insured ships used for smuggling, which serves as an indication for both the blatancy of the smugglers and the foothold they had gained.
Ultimately the agents of the rise of tea smuggling, namely the East India Company and the British government, were also responsible for its demise. While tea drinking had become widespread during the course of the 1700s, the East India Company hadn't been able to import and sell on any more tea. In order to boost their profits they needed to remove the illegal trade and realising that the black market in tea was due to the exorbitant tax of 119%, they lobbied parliament to reduce it. In 1784, William Pitt the Younger reduced the tax to 12.5%. With the advent of affordable legitimate tea, it was no longer profitable for the smugglers to deal in tea and their involvement quickly ceased.