Typhoo Tea falls into adminstration
Typhoo Tea has entered administration due to a decline in sales, increasing losses, and mounting debts, despite being a well-established brand for 120 years.
The consulting company Kroll has been tasked with managing the operations and seeking a purchaser for the tea business.
Supreme, a company that produces vaping products and batteries, is leading the race to acquire Typhoo. However, they mentioned that there is "no guarantee" that the acquisition will actually take place.
Typhoo has been working on improving its situation for a while now, but faced a hurdle when intruders vandalized its old factory in Moreton, Merseyside, last year.
Kroll stated that the company has been looking into selling its business and assets, and this process is nearing completion.
The administration process offers Typhoo Tea a safeguard, enabling the Joint Administrators to complete the sale and help save the company.
Supreme, a company located in Manchester that sells and distributes Duracell and Energiser batteries along with Elf Bar vapes, is close to acquiring the company as part of its strategy to expand its business offerings.
At the moment, it doesn't carry or sell any tea brands, but it does collaborate with brands that offer soft drinks, workout supplements, and multivitamin gummies.
Supreme announced that discussions are progressing well, but emphasized that no definitive terms for the potential acquisition have been settled yet.
Kroll noted that Typhoo has been facing "major cash flow problems due to disruptions in the supply chain and related service challenges."
The company's recent report for the year ending September 2023 reveals that pre-tax losses increased to £38 million, up from £9.6 million, while revenue decreased to £25.3 million, down from £33.7 million.
In the meantime, the company's liabilities have increased to a point where they now exceed the worth of its assets.
The findings also indicated that there were £24.1 million in "extraordinary expenses," a portion of which is linked to the burglary at the Moreton facility, which was closed down last year.
Typhoo reported that in August 2023, a group of coordinated intruders entered the Moreton site and stayed there for several days.
It noted that the intruders caused significant harm and rendered the location "hard to access."
Typhoo reported that a significant amount of tea became unsalable, which prevented them from being able to meet certain customer orders.
Typhoo Tea is recognized as one of the leading tea brands in the UK, alongside well-known names like PG Tips, Tetley, and Yorkshire Tea.
The company, based in Bristol, was established in 1903 by John Sumner, who was born in Birmingham. Today, it is predominantly owned by the private equity firm Zetland Capital.
The announcement comes just two months after the company revamped its brand through the "Fear Free Tea" initiative, which focuses on addressing violence and mistreatment in the tea supply chain.
Typhoo stated that it couldn’t assure that its products are completely "fear free," but it encourages 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 reported experiencing sexual abuse.
