Typhoo Tea, one of Britain’s oldest tea companies, is teetering on the edge of administration after enduring years of challenges, including a costly break-in at its Wirral factory.
According to court filings made on Thursday, Typhoo has filed a notice to appoint administrators. This move allows companies temporary protection from creditors while exploring options to address their debts.
The company is reportedly using the process to seek rescue solutions, with administrators from EY already lined up. However, filing the notice does not equate to Typhoo entering administration at this stage.
Dave McNulty, Typhoo's chief executive, commented: “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 additional information.”
Founded in 1903 by Birmingham grocer John Sumner, Typhoo was once among the UK’s best-loved tea brands. However, in recent years, the company has struggled as Britons increasingly shift towards coffee, energy drinks, and novelty beverages like bubble tea.
According to Mintel, tea consumption in the UK has been steadily declining and is projected to drop by 8% between 2023 and 2028.
Typhoo’s revenues fell from £34 million in 2022 to £25 million in 2023, while losses surged from £9.7 million to £38 million in the same period, as per publicly available accounts.
The steep rise in losses partly stemmed from a break-in at the company’s mothballed Merseyside factory. The incident caused extensive damage to machinery and tea stock, delaying the factory’s sale, which was eventually completed in June 2024.
Typhoo’s future now hangs in the balance as it navigates a path to potential recovery or sale. Typhoo Tea revealed it had to absorb £24 million in exceptional costs during the 2023 financial year, largely due to damage caused by a break-in. Company executives admitted these costs had a "material" impact on its operations.
Adding to its challenges, Typhoo has faced mounting competition from a surge of "wellness" tea brands entering the market. Meanwhile, tea manufacturers have struggled with supply chain disruptions, including tea paper shortages and rising import costs following Brexit.
Private equity firm Zetland Capital has held the majority stake in Typhoo since 2021. By the end of September 2023, Typhoo’s debts had climbed to £73 million, up from £53 million the previous year.
Mollie King at Lark 
