Typhoo Tea Teeters on the Brink of Administration

The iconic British tea brand Typhoo Tea, established 120 years ago, is facing potential administration as it struggles with plummeting sales, escalating losses, and rising debts.

The company has filed a court notice granting it breathing space to explore solutions, according to Typhoo’s Chief Executive, Dave McNulty, who spoke to the BBC.

Typhoo has been working on a turnaround strategy for some time but faced a significant setback last year when trespassers caused extensive damage to its former factory in Moreton, Merseyside.

“Given the sensitive nature of the situation, we are not in a position to comment further,” Mr McNulty said. He emphasised that the notice of intent does not place Typhoo in administration but initiates a confidential process involving accountancy firm EY.

The company’s latest financial results reveal widening losses of £38m for the year ending September 2023, up from £9.6m the previous year. Meanwhile, sales fell sharply to £25.3m from £33.7m.

A Storied Brand

Founded in 1903 and headquartered in Bristol, Typhoo Tea is recognised as one of the UK’s major tea brands, alongside PG Tips, Tetley, and Yorkshire Tea.

Currently, Typhoo is majority-owned by private equity firm Zetland Capital, which took over in 2021. Previously, the company was under the ownership of Indian conglomerate Apeejay Surrendra Group, which acquired it in 2005 before selling its stake to Zetland.

Factory Trespass Incident

The company’s troubles were exacerbated in August 2023 when organised trespassers occupied its Moreton site for several days. The incident caused extensive damage, rendering large quantities of tea unusable and disrupting customer orders.

The financial strain was further intensified by £24.1m in exceptional costs, a portion of which stemmed from the break-in at the Moreton plant, which had already been decommissioned.

Efforts to Modernise

The looming threat of administration comes just months after Typhoo launched its "Fear Free Tea" campaign, which spotlighted violence and abuse within the global tea supply chain. While Typhoo acknowledged it could not guarantee its tea was "fear free", it aimed to provoke industry-wide reflection and action on these issues.

The campaign followed a 2023 BBC Panorama documentary, Sex for Work: The True Cost of our Tea, which revealed widespread sexual abuse affecting women on tea plantations.

Typhoo’s future now hangs in the balance as it attempts to navigate these financial and reputational challenges.