One of Britain's oldest tea brands, Typhoo Tea, is on the brink of administration after years of declining sales and substantial losses. The company has filed a notice to appoint administrators, according to court documents, seeking temporary protection from creditors while exploring potential rescue options.
The move comes as Typhoo grapples with a challenging market environment where tea consumption has been steadily declining. Britons have increasingly favoured coffee, energy drinks, and novelty beverages like bubble tea, leading to a significant drop in demand for traditional tea.
Research firm Mintel predicts an 8% decline in tea consumption between 2023 and 2028, further amplifying the pressure on Typhoo's sales. The company's financial performance has reflected this trend, with revenue dropping from £34 million in 2022 to £25 million in 2023. Meanwhile, losses ballooned from £9.7 million to £38 million during the same period.
Adding to Typhoo's financial woes was a costly break-in at its mothballed factory in Merseyside, which resulted in significant damage to machinery and tea stock. This incident further delayed the sale of the factory, which was finally completed in June 2024.
Typhoo, founded in 1903 by Birmingham grocer John Sumner, was once a leading name in the UK tea market. However, the company has struggled to maintain its position amidst evolving consumer preferences and fierce competition.
Dave McNulty, chief executive of Typhoo, stated: "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." EY has been appointed as the potential administrator, although the notice does not indicate that Typhoo is formally under administration.
The appointment of administrators represents a crucial step in Typhoo's efforts to navigate its financial difficulties. The company is now exploring potential rescue options, hoping to secure a future for the iconic brand despite the challenges it faces.
