Typhoo Tea falls into adminstration
Typhoo Tea has entered administration due to a significant decline in sales, increased losses, and mounting debts, impacting the brand that has been around for 120 years.
The advisory company Kroll has been tasked with managing the administration and seeking a buyer for the tea company.
Supreme, a company that produces vapes and batteries, is leading the charge to acquire Typhoo. However, they have stated that there is "no guarantee" that the transaction will be finalized.
Typhoo has been working on revitalizing its business for a while now, but it faced a setback when intruders vandalized its old factory in Moreton, Merseyside last year.
Kroll mentioned that the company has been looking into selling its business and assets, and this process is nearing completion.
The administration process safeguards Typhoo Tea, enabling the Joint Administrators to complete the sale and help save the business.
Supreme, located in Manchester and primarily focused on selling and distributing Duracell and Energiser batteries along with Elf Bar vapes, is close to acquiring the company to broaden its business activities.
At present, the company does not carry or sell any tea brands, but it does collaborate with brands that offer soft drinks, fitness supplements, and multivitamin gummies.
Supreme mentioned that discussions are in the "advanced stage," but emphasized that "no final agreement on the possible acquisition has been reached."
Kroll mentioned that Typhoo has been facing serious cash flow problems due to disruptions in the supply chain and the related service challenges.
As per the company's most recent reports for the year ending September 2023, pre-tax losses increased to £38 million, up from £9.6 million, while revenue dropped to £25.3 million, down from £33.7 million.
At the same time, the company's liabilities have increased to exceed the worth of its assets.
The findings also showed that there were £24.1 million in "extraordinary expenses," partly due to the break-in at the Moreton facility, which was closed last year.
Typhoo stated, "In August 2023, a group of coordinated intruders gained access to the Moreton facility and stayed there for several days."
It noted that the intruders caused significant harm and rendered the location "unreachable."
Typhoo announced that a significant amount of tea became unusable, preventing them from meeting certain customer orders.
Typhoo Tea is considered one of the leading tea brands in the UK, ranking alongside popular names like PG Tips, Tetley, and Yorkshire Tea.
The company, which is based in Bristol, was established by John Sumner, who hails from Birmingham, in 1903. Presently, most of its ownership belongs to the private equity firm Zetland Capital.
This announcement follows closely on the heels of the company's recent rebranding effort, which included the launch of the "Fear Free Tea" campaign aimed at raising awareness about violence and mistreatment within the tea supply chain, just two months ago.
Typhoo stated that they cannot assure that their own product is completely "fear-free," but they encourage the tea industry to reflect on and evaluate whether their teas are free from sexual violence.
The 2023 BBC Panorama documentary titled "Sex for Work: The True Cost of our Tea" revealed that three out of four women surveyed at tea plantations had experienced sexual abuse.
