Typhoo Tea, a historic name in the UK’s tea industry, has entered administration, leading to potential acquisition talks with a vape company. The unexpected development highlights the shifting landscape of the beverage sector as traditional brands face financial turmoil.
The well-known brand, Typhoo Tea, recently announced it had filed for administration amidst severe financial strain. This week, a vape manufacturer, listed on the London Stock Exchange, disclosed advanced discussions to acquire Typhoo, although the outcome remains uncertain. These negotiations form part of the vape company’s strategy to diversify its business interests, particularly its drinks and nutrition segments.
The backdrop to this potential acquisition is Typhoo’s declining financial performance, reporting a significant drop in sales from £34 million in 2022 to £25 million last year. Additionally, the brand experienced a staggering rise in losses from £9.7 million to £38 million, compounded by debts nearing £70 million. The administration process, managed by insolvency experts at Kroll, is designed to protect Typhoo as they attempt to finalise a rescue deal.
A spokesperson for Kroll commented on the situation, noting the considerable cash flow issues Typhoo has faced, exacerbated by disruptions in their supply chain and subsequent service challenges. These obstacles have been significant, but the administration process aims to facilitate a business sale and salvage Typhoo’s operations.
Adding to the financial woes was a costly break-in at Typhoo’s Merseyside factory, which inflicted extensive damage on both equipment and stock. This incident led to exceptional costs of £24 million being absorbed during the last financial year. Despite these challenges, there remains hope that the vape company’s interest could result in a successful acquisition, stabilising Typhoo’s future.
The possibility of a vape company acquiring Typhoo Tea underscores the changing dynamics within the beverage industry. As Typhoo navigates its financial difficulties under administration, the potential deal represents a strategic shift for the vape firm seeking to broaden its market presence. The coming months will determine whether this unlikely partnership will come to fruition and provide the necessary lifeline for one of the UK’s oldest tea brands.
