Typhoo Tea, one of the UK's iconic tea brands, has officially fallen under administration, marking the beginning of what might be the end for the storied company after over 120 years of tradition. Once regarded as one of the go-to names alongside giants like PG Tips and Tetley, Typhoo is now grappling with significant financial difficulties amid slumping sales and increasing debts.
According to reports, advisory firm Kroll has been appointed to handle the administration process, which includes searching for potential buyers to take over the struggling business. Surprisingly, it seems vape and battery manufacturer Supreme is the front-runner to acquire Typhoo. Supreme, which primarily sells vaping products and batteries, stated, "While talks are progressing at advanced stages, no final terms have been established yet." This potential acquisition could help Supreme diversify its offerings, especially as new government regulations on disposable vapes loom on the horizon.
The tea firm has been striving for stability, particularly following setbacks like the severe damage inflicted by trespassers last year at its long-time factory based in Moreton, Merseyside. This incident led to the closure of the site and severely hurt operations, which compounded the company's existing monetary woes.
Disclosures from Typhoo revealed how dire the situation has become. From September 2022 to 2023, the company registered staggering pre-tax losses which jumped from approximately £9.6 million to £38 million. Meanwhile, sales plummeted by nearly 25% to £25.3 million, indicative of the brand's shaky footing amid fierce competition and changing market dynamics.
Interestingly, financial reports also cited operational costs exceeding expectations, with £24.1 million attributed to “exceptional costs,” many of which stem from the aforementioned factory incident where organized trespassers caused extensive damage. Typhoo stated, "During August 2023, trespassers broke onto the Moreton site, resulting in significant destruction and accessibility issues, which made much of our tea stock unusable and hampered the fulfillment of customer orders." The property's sale this past June contributed to the whirlwind of changes currently engulfing the brand.
Despite their rocky situation, Typhoo attempted to revitalize its brand this past summer with the rollout of the “Fear Free Tea” campaign. This initiative aimed to raise awareness about violence and abuse prevalent within the tea supply chain, particularly targeting mistreatment suffered by women within tea plantations globally. The campaign highlighted the serious issues faced by women, with documentaries like the 2023 BBC Panorama episode titled Sex for Work: The True Cost of our Tea bringing these topics to the forefront. The documentary revealed shocking statistics, including how three out of every four women questioned at tea plantations had experienced some form of sexual abuse.
Founded back in 1903 by Birmingham-born John Sumner, Typhoo Tea has been around for over a century, proudly representing the rich heritage of British tea drinking. Though majority ownership has shifted to private equity firm Zetland Capital since 2021, its essence as one of the UK’s primary tea brands is still fondly remembered by many. This history, coupled with the emotional attachment customers feel for the brand, serves as the backdrop against which Typhoo’s current crisis is set.
With current finances indicating debts surpassing asset values, the pressure mounts on Kroll and Supreme to pave the way for Typhoo’s potential turnaround or closure. The pressure doesn’t just lie on the balance sheets — for hundreds of employees who remain uncertain about their future with the company, the stakes grow every day. A representative for Kroll noted, “The administration process provides Typhoo Tea with protection, allowing the Joint Administrators to finalize the sale with the hope of rescuing the brand.” The unlisted number of employees currently employed by Typhoo is reported to be fewer than 100, leaving many concerned about their livelihoods as the administration process plays out.
Despite the doom and gloom hovering over Typhoo, its legacy remains undeniable. Will Supreme step up to save the brand? Or could this be the end of the road for one of Britain’s beloved tea makers? Only time will tell how this complex story of business and identity will resolve itself.
