Britain’s oldest tea firm on brink of administration after going £70 million in debt

A much loved British tea brand is on the brink of collapse as it prepares to enter administration. Typhoo Tea, with over 120 years in business, faces challenges of declining sales and mounting debts.

The firm filed notice it intends to appoint administrators EY and seek rescue options after finding itself with losses escalated from £9.6 million to £38 million in the year ending September 2023. During the same period, sales dropped from £33.7 million to £25.3 million.

The company has also dealt with multiple setbacks including customers swapping tea for coffee, bubble tea, or energy drinks, and a high-profile break-in.

Last August trespassers broke into Typhoo’s former Moreton factory in Merseyside. The incident caused damage to expensive tea equipment and stock, and rendered substantial amounts of tea for customers orders unusable.

The company say they have spent £24.1 million in repairs and replenishing stock. Typhoo’s debts reached £73 million in September 2023.

Dave McNulty, chief executive of Typhoo, 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.”

Founded in 1903 by Birmingham grocer John Summer, 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.

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.

Meanwhile, shoppers are increasingly switching from brands such as Typhoo, PG Tips and Twinings for cheaper supermarket alternatives.

The company has also been marked by an industry scandal of sexual violence in tea plantations. A joint investigation by BBC Africa Eye and Panorama last February uncovered widespread sexual abuse on farms supplying some of the UK’s most popular tea brands.

Typhoo said it had moved from working with around 300 tea plantations in east Africa to just three, all chosen for their commitment to women’s safety.

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