Typhoo Tea Enters Administration Following Sales Decline

The 120-year-old brand Typhoo Tea has entered administration, a development attributed to a decline in sales, expanding losses, and increasing debt. Kroll, an advisory firm, has been designated to manage the administration process and seek a purchaser for the tea enterprise. Supreme, a manufacturer of vapes and batteries, is considered the leading candidate to acquire Typhoo, though the company stated there was “no certainty” a transaction would proceed. Typhoo had been engaged in efforts to revitalize its operations for a period, but encountered a setback when its former factory in Moreton, Merseyside, sustained damage from trespassers last year. Kroll stated: “The company has been exploring a sale of the business and assets which is in the process of concluding.” It added: “The administration process provides Typhoo Tea with protection, allowing the Joint Administrators to finalise the sale in order to rescue the business.” Supreme, based in Manchester, which handles the stocking and distribution of Duracell and Energiser batteries, alongside Elf Bar vapes, is reportedly close to acquiring the company as part of an initiative to broaden its business activities. While it currently does not stock or distribute any tea brands, Supreme engages with brands in the soft drinks, gym supplements, and multivitamin gummies sectors. Supreme indicated that discussions had reached an “advanced stage” but clarified that “no final terms of the potential acquisition have been agreed.” Kroll further noted that Typhoo had encountered “significant cash flow constraints as a result of supply chain disruptions and subsequent service issues.” The company’s most recent financial results, covering the period up to the end of September 2023, show that pre-tax losses expanded to £38m from £9.6m, and sales decreased to £25.3m from £33.7m. Concurrently, the company’s liabilities have escalated to exceed the valuation of its assets. Furthermore, the results disclosed “exceptional costs” amounting to £24.1m, with a portion of these costs linked to the break-in at the Moreton plant, which ceased operations last year. Typhoo stated: “During August 2023, a group of organised trespassers broke into the Moreton site and occupied it for several days.” It further noted that the trespassers inflicted “extensive damage” and rendered the site “inaccessible.” Typhoo reported that a significant quantity of tea became unusable, preventing the fulfillment of certain customer orders. Typhoo Tea is broadly recognized as a prominent tea brand in the UK, alongside competitors such as PG Tips, Tetley, and Yorkshire Tea. The company, headquartered in Bristol, was established in 1903 by John Sumner, who was born in Birmingham. It is presently majority-owned by the private equity firm Zetland Capital. This administration follows by only two months the company’s brand revamp with “Fear Free Tea,” a campaign designed to draw attention to violence and abuse within the tea supply chain. Typhoo clarified that it did not guarantee its own product was “fear free,” but rather that it “invites the tea industry to question and assess whether their teas are free of sexual violence.” A 2023 BBC Panorama documentary titled Sex for Work: The True Cost of our Tea revealed that three out of four women interviewed on tea plantations had experienced sexual abuse. Copyright 2024 BBC. All rights reserved. The BBC is not responsible for the content of external sites. Information regarding our approach to external linking is available.