Typhoo Tea, a 120-year-old brand, is facing financial difficulties and is on the brink of potential administration. The company has reported a significant decrease in sales, a widening of losses, and a rise in debts. Typhoo’s chief executive, Dave McNulty, has filed a notice at court to appoint administrators, giving the company some time to explore possible solutions.
The company has been struggling to recover from setbacks, such as the damage caused by trespassers at its former factory in Moreton, Merseyside. Mr. McNulty mentioned that they are not in a position to provide further details due to the sensitive nature of the situation. The appointment of the accountancy firm EY to handle the process does not necessarily mean that Typhoo is already in administration, but rather part of an ongoing confidential procedure.
In the most recent financial results available, Typhoo reported a widening of losses to £38m from £9.6m, with a decrease in sales to £25.3m from £33.7m. The Bristol-headquartered company, founded in 1903, is considered one of the UK’s major tea brands, competing with the likes of PG Tips, Tetley’s, and Yorkshire Tea. Majority-owned by private equity firm Zetland Capital, Typhoo was previously owned by the Indian conglomerate Apeejay Surrendra Group before being acquired by Zetland in 2021.
The financial reports also revealed £24.1m in exceptional costs, including damages caused by trespassers at the Moreton site. The break-in resulted in extensive damage, rendering a significant amount of tea unusable and disrupting the company’s ability to fulfill certain customer orders. This incident, along with the overall financial challenges, has contributed to the company’s current predicament.
The potential threat of administration comes shortly after Typhoo launched its “Fear Free Tea” campaign, aiming to raise awareness about violence and abuse in the tea supply chain. While the company does not claim that its own product is entirely “fear free,” it encourages the tea industry to assess and address issues related to sexual violence. The BBC Panorama documentary “Sex for Work: The True Cost of our Tea” highlighted disturbing findings, with three in four women interviewed at tea plantations reporting instances of sexual abuse.
As Typhoo Tea navigates through these challenging times, the future of the iconic brand remains uncertain. With the appointment of administrators and ongoing efforts to address financial difficulties, the company is facing a critical juncture in its long history. The impact of these developments on employees, customers, and stakeholders underscores the importance of finding sustainable solutions to secure the company’s future in the competitive tea market.
