Typhoo Tea is preparing to enter administration after 120 years in business, amid falling sales and growing debt.
Typhoo, one of Britain’s oldest tea companies, has filed a court case to explore potential solutions, with the intention of appointing EY as administrator.
In a statement to Sky News, chief executive Dave McNulty said: “This action has been taken to enable us to pursue the sale of the business. A further statement will be issued in due course with further information.
The company’s financial woes were highlighted in its latest figures, which show losses fell from £9.6m to £38m in the financial year ending September 2023. During the same period, sales fell from £33.7 million to £25.3 million.
A significant setback occurred in August 2023 when intruders broke into Typhoo’s former Moreton factory on Merseyside. The incident caused extensive damage, rendered significant quantities of tea unusable and disrupted customer orders.
This contributed to £24.1m of exceptional costs for the business.
Founded in 1903, Typhoo Tea is, alongside PG Tips, Tetley’s and Yorkshire Tea, one of Britain’s leading tea brands.
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Ownership of the company changed hands in 2021 when private equity firm Zetland Capital acquired it from Indian conglomerate Apeejay Surrendra Group, which had bought the company from Premier Foods in 2005.
Mr McNulty stressed the company was not yet in administration, describing it as “an ongoing confidential process”, with the filing providing temporary protection for Typhoo while it explores options for its future.
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Founded in 1903 by Birmingham grocer John Sumner, Typhoo’s struggles reflect changing consumer preferences in the UK. Industry analyst Mintel predicts an 8% drop in tea consumption between 2023 and 2028, with UK consumers increasingly favoring coffee, energy drinks and trendy drinks like bubble tea.
Although the administrative notice offers temporary protection from creditors, it represents a crucial moment for one of Britain’s most established tea brands as it seeks a way forward.