Typhoo Tea, the United Kingdom’s oldest tea brand, is on the verge of collapse and is actively exploring a rescue deal after grappling with years of accumulating debt.
Recent court filings reveal that Typhoo Tea has filed a notice to appoint administrators from the firm EY. This move comes as the company seeks a viable path forward to salvage its operations.
Last year, the company experienced a dramatic 26% drop in sales, plummeting from £34 million in 2022 to a mere £25 million in the most recent financial year. The losses escalated sharply, reaching £38 million, compared to £9.7 million previously.
A significant financial blow resulted from a break-in at Typhoo’s Merseyside factory, which led to extensive damage to equipment and inventory. The brand was forced to absorb £24 million in exceptional costs primarily linked to the incident.
In a strategic shift, Typhoo recently appointed Dave McNulty, former head of Burts crisps, as the new Chief Executive Officer. McNulty 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 further information.”
Moreover, as part of an initiative to revamp its supply chain to address social issues, the company has severed ties with 300 tea plantations, retaining contracts with only three. This decision is anticipated to impact consumer pricing, potentially increasing costs.
Typhoo’s ongoing efforts to tackle social challenges highlight the complexities of sustaining ethical practices while managing financial viability. This balance remains a critical concern for the company as it navigates these troubled waters.
Typhoo Tea’s current predicament underscores the challenges facing long-standing businesses in modern economic climates. As the brand seeks a rescue strategy, the outcomes will be closely monitored by the industry.
