For more than 120 years, Typhoo Tea has been one of the UK’s most recognisable brands. But amid financial distress – and decline in popularity for its flagship product – administrators from EY have been brought in to seek a rescue deal for the historic company.
“This action has been taken to enable us to pursue a sale of the business,” said Dave McNulty, the chief executive of Typhoo. “This does not mean that we are in administration. Given the delicate nature of this we are not in a position to comment any further.”
In recent years, Typhoo’s financial health has declined swiftly. The firm saw its 2023 sales tumble by 26%, sinking to just £25 million – compared to £34 million in 2022. At the same time, losses have soared to £38 million from the previous year’s £9.7 million, underscoring a major consumer shift that is impacting the century-old brand.
Recent analysis from industry expert Mintel estimates an 8% decline in tea consumption across Britain, from 2023 to 2028, as the traditionally tea-loving nation’s consumers increasingly favour alternatives. These include coffee – with quality products increasingly affordable for use in the home – along with viral trends such as bubble tea and energy drinks.
The company’s downfall has also been brought on by a major break-in in its Merseyside factory. The incident saw the perpetrators cause extensive damage, and incurred costs of £24 million for the 2023 fiscal year – an unforeseen expense understood to have strained Typhoo’s finances.
Looking ahead, Typhoo has filed a notice to appoint administrators from EY. As Typhoo looks to buy some breathing space with creditors and to pay back its debts, the Big Four professionals will now explore rescue options.
With the firm’s future hinging on a viable agreement, the current strain on Typhoo threatens to bring to an end one of the oldest continuous tea brands in the UK. The company’s history can be traced back to the 1860s, as British businesses sought to exploit gains from the Opium Wars with China.
In 1863, William Sumner published ‘A Popular Treatise on Tea’, following the first post-war trade missions to China from London. In 1870, he and his son John Sumner founded a pharmacy and grocery business in Birmingham. The business was taken over by John Sumner Jr. in the 1900s – who decided to create a new tea that he could sell in the store. The selected name, Typhoo, is derived from the Mandarin for “doctor”.
Over the years, the firm has had many different owners. In 2021, Typhoo was acquired by British private-equity firm Zetland Capital – which announced in 2023 it would be closing its Moreton factory and outsourcing production – before trespassers broke onto the site and damaged the remaining equipment there.