Typhoo Tea Appoints Administrators as It Seeks Rescue Deal

Typhoo Tea, the UK’s oldest tea brand, has filed a notice to appoint administrators, signaling its search for a rescue deal after years of mounting financial challenges.

Key Developments:

• Administrative Filing:
  Typhoo has sought administrators from EY to explore potential rescue options, as revealed by recent court filings.
• Sales Decline:
  Sales dropped by 26% in 2023 to £25 million, down from £34 million the previous year.
• Mounting Losses:
  Losses surged from £9.7 million in 2022 to £38 million in 2023.
• Exceptional Costs:
  The financial strain was exacerbated by a break-in at Typhoo’s Merseyside factory, which caused extensive damage to equipment and stock, leading to £24 million in exceptional costs.

Leadership and Strategy Shifts:

• In October, Dave McNulty, former head of Burts Crisps, was appointed CEO.
• Under McNulty’s leadership, Typhoo aimed to revamp its supply chain, particularly focusing on addressing social issues like ending sexual violence against women in tea plantations in Africa.
• The strategy included dropping contracts with 300 tea plantations, reducing sourcing to just three, which was expected to lead to higher consumer prices.

Next Steps:

Typhoo’s CEO 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.”

Market Context:

Typhoo’s struggles come as the tea market faces evolving consumer preferences, rising costs, and increased competition from modern tea brands and substitutes. The potential rescue or sale could mark a turning point for this iconic brand, which has been a staple in British households for decades.

This development highlights challenges in balancing operational issues, ethical sourcing, and profitability in a competitive FMCG sector.