Typhoo Tea on the brink as Brits switch to coffee

15 November 2024, 12:38 | Updated: 15 November 2024, 13:57

Typhoo Tea is preparing to enter administration after 120 years in business, amid declining sales and mounting debts.

Typhoo, one of Britain's oldest tea companies, has filed a court notice to explore potential solutions, with plans to appoint EY as administrators.

In a statement to Sky News, chief executive Dave McNulty said: "This action has been taken to enable us to pursue a sale of the business. A further statement will be issued in due course with further information."

The company's financial struggles were highlighted in its latest figures, which showed that losses escalated from £9.6m to £38m in the year ending September 2023. During the same period, sales dropped from £33.7m to £25.3m.

A significant setback occurred in August 2023 when trespassers broke into Typhoo's former Moreton factory in Merseyside. The incident caused extensive damage, rendered substantial amounts of tea unusable, and disrupted customer orders.

This contributed to £24.1m in exceptional costs for the company.

Founded in 1903, Typhoo Tea stands alongside PG Tips, Tetley's, and Yorkshire Tea as one of Britain's major tea brands.

The company's ownership changed hands in 2021 when private equity firm Zetland Capital acquired it from Indian conglomerate Apeejay Surrendra Group, which had purchased the business from Premier Foods in 2005.

Mr McNulty stressed that the company was not yet in administration, describing it as "an on-going confidential process," with the filing providing Typhoo temporary protection while it explores options for its future.

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Founded in 1903 by Birmingham grocer John Sumner, Typhoo's struggles mirror changing consumer preferences in the UK. Industry analyst Mintel projects an 8% decline in tea consumption between 2023 and 2028, as British consumers increasingly favour coffee, energy drinks, and trending beverages like bubble tea.

While the administration notice provides temporary protection from creditors, it represents a crucial moment for one of Britain's most established tea brands as it seeks a path forward.

(c) Sky News 2024: Typhoo Tea on the brink as Brits switch to coffee