A vape manufacturer has emerged as a potential saviour for one of the UK’s oldest tea brands, Typhoo Tea, following its entry into administration this week. The London-listed company, Supreme, revealed to its shareholders that negotiations to acquire Typhoo Tea are “at an advanced stage,” despite uncertainties surrounding the finalisation of the deal.
The acquisition aligns with Supreme’s strategy to expand its drinks and nutrition sectors, moving beyond its traditional focus on vaping. This shift comes in anticipation of the UK government’s impending ban on disposable vapes set for the end of 2025.
Typhoo Tea has faced significant financial difficulties, reflected in a 26% drop in sales, bringing its revenue down to £25 million last year from £34 million in 2022. Concurrently, the company’s losses escalated to £38 million from £9.7 million, with debts soaring to nearly £70 million.
The company recently filed for administration with Kroll, insolvency specialists, appointed to manage the process. Kroll hopes to facilitate a rescue deal that would protect Typhoo Tea and allow administrators to complete the sale successfully. A Kroll spokesperson highlighted the severe cash flow problems faced by Typhoo due to supply chain disruptions and service issues.
A notable factor contributing to Typhoo’s struggles was a break-in at its Merseyside factory, which caused extensive damage to equipment and stock. This incident forced the brand to incur exceptional costs amounting to £24 million in the 2023 financial year.
The future of Typhoo Tea hangs in the balance as talks progress. Should the acquisition by Supreme materialise, it could mark a significant turning point for the beleaguered tea brand, providing much-needed stability and a path to recovery in a rapidly changing market.
