Typhoo Tea collapses into administration as more than 100 jobs at risk

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Typhoo, the celebrated British tea brand, has plunged into administration amid a harrowing rescue deal uncertainty. The company, one of the UK's most longstanding tea firms, lodged an administration notice this Wednesday, stating that insolvency specialists from the firm Kroll were taking over.

The historic company has spent the past fortnight in a fervent scramble to settle debts with creditors. This alarming development threatens the livelihoods of more than 100 employees.

In an announcement issued today, the company expressed its plight: "The company has experienced significant cash flow constraints as a result of supply chain disruptions and subsequent service issues. The company has been exploring a sale of the business and assets, which is in the process of concluding. The administration process provides Typhoo Tea with protection, allowing the Joint Administrators to finalise the sale in order to rescue the business."

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Founded in 1903 by John Sumner, a Birmingham-based grocer, Typhoo was once the toast of British tea drinkers but has seen its market share slip away recently, largely due to a national shift towards coffee. Although the hunt for a new owner continues, Typhoo will remain operational and available on supermarket shelves — keeping the nation’s kettles bubbling for the foreseeable future.

The brand, famed for its catchy "you only get an oo with Typhoo" slogan and a star-studded roster of endorsers such as Nigella Lawson, Ben Fogle and the iconic Cilla Black, aims to find a saviour to revitalise its fortunes, reports the Mirror.

Typhoo has recorded a substantial £38 million loss for last year, with its revenue dropping by a quarter to £25.3 million. The company, which employed 116 people by late 2023, also experienced significant operational disruption when intruders vandalised its Merseyside factory previously that year, leading to "extensive damage" and rendering the facility "inaccessible."

As part of the 2023 financial toll, Typhoo had to write off £24 million in exceptional costs, predominantly due to this incident.

Despite these setbacks, Typhoo managed to finalise the sale of the factory in June 2024. Debt at the firm mounted to £73 million as of September 2023, from £53 million the year before.

Since 2021, Zetland Capital has been the main investor in Typhoo, which recently appointed ex-Burts crisps chief Dave McNulty as CEO in October and initiated a revamp of its supply chain operations. This initiative aimed to combat sexual violence against female workers in East African tea plantations and involved slashing its plantation partners in the region from 300 to a mere three.

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