Typhoo Tea collapses into administration

(Sharecast News) - Typhoo Tea, one of Britain's oldest and most iconic tea brands, crashed into administration on Thursday after years of financial struggles. The company, founded in 1903, had been hit hard by changing consumer preferences, rising debts, and operational challenges, including a costly break-in at its former factory in Moreton, Merseyside.

Advisory firm Kroll was appointed to oversee the administration process, aiming to secure a buyer for the business and rescue it from collapse.

Talks were reportedly at an advanced stage with the AIM-traded Supreme, a distributor of batteries and vape products, which was seeking to diversify into new markets.

Supreme said no final terms had been agreed, however.

Typhoo's pre-tax losses widened to £38m in the year ended last September, up from £9.6m in the prior year, while revenues dropped to £25.3m from £33.7m.

Exceptional costs of £24.1m, including those stemming from the break-in, compounded the company's challenges.

Trespassers caused extensive damage to the Moreton factory, rendering stock unusable and delaying its eventual sale in mid-2024.

The tea market has been under sustained pressure as British consumers increasingly opted for coffee, herbal teas, and energy drinks.

Research firm Mintel predicted tea consumption was set to decline by 8% between 2023 and 2028.

Meanwhile, supermarket own-brand teas and wellness-focused competitors were eroding traditional brands' market share.

Typhoo recently sought to revitalize its image with a 'Fear Free Tea' campaign highlighting ethical concerns in the tea supply chain.

The initiative, while drawing attention to issues such as sexual violence on tea plantations, also resulted in significant changes to its sourcing practices, limiting suppliers and potentially increasing costs.

Despite efforts to adapt, Typhoo's debts soared in recent years, reaching £73m by the end of September 2023, with majority owner Zetland Capital facing mounting pressure since acquiring the firm in 2021.

Reporting by Josh White for Sharecast.com.