Typhoo Tea falls into administration as sales slide

Typhoo Tea has fallen into administration as the 120-year-old brand's sales slump, losses widen and debts rise.

Advisory firm Kroll has been appointed to handle the administration and find a buyer for the tea business.

Vape and battery maker Supreme is front runner to buy Typhoo, but it said there was "no certainty" a deal will go ahead.

Typhoo has been trying to turn itself around for some time, but it suffered a setback after trespassers damaged its former factory in Moreton, Merseyside last year.

"The company has been exploring a sale of the business and assets which is in the process of concluding," Kroll said.

"The administration process provides Typhoo Tea with protection, allowing the Joint Administrators to finalise the sale in order to rescue the business."

Manchester-based Supreme, which stocks and distributes Duracell and Energiser batteries as well as Elf Bar vapes, is on the cusp of buying the firm in an attempt to diversify its business.

It does not currently stock or distribute any tea brands, but it does work with brands of soft drinks, gym supplements and multivitamin gummies.

Supreme said talks were at an "advanced stage" but that "no final terms of the potential acquisition have been agreed".

Kroll added that Typhoo had been dealing with "significant cash flow constraints as a result of supply chain disruptions and subsequent service issues".

According to the firm's latest results, which cover the year to the end of September 2023, pre-tax losses widened to £38m from £9.6m and sales fell to £25.3m from £33.7m.

Meanwhile, the company's debts have ballooned to greater than the value of its assets.

The results also revealed £24.1m worth of "exceptional costs", some of which relate to the break-in at the Moreton plant, which was shut down last year.

Typhoo said: "During August 2023, a group of organised trespassers broke into the Moreton site and occupied it for several days."

It added that the trespassers caused "extensive damage" and made the site "inaccessible".

Typhoo said a lot of tea was rendered unusable and it was unable to fulfil some orders to customers.

Typhoo Tea is widely seen as one of the UK's main tea brands, alongside the likes of PG Tips, Tetley and Yorkshire Tea.

The Bristol-headquartered company was founded by Birmingham-born John Sumner in 1903. It is currently majority-owned by private equity firm Zetland Capital.

Its administration comes just two months after the company revamped its brand with "Fear Free Tea", a campaign highlighting violence and abuse in the tea supply chain.

Typhoo said it did not guarantee that its own product was "fear free", but that it "invites the tea industry to question and assess whether their teas are free of sexual violence".

The 2023 BBC Panorama documentary Sex for Work: The True Cost of our Tea found that three in four women interviewed at tea plantations had suffered sexual abuse.