One of UK’s oldest tea brands may be rescued by vaping group

One of Britain’s best-known tea brands is in talks over a potential rescue deal after falling into administration.
Typhoo Tea, which was founded in 1903, has filed a notice to appoint administrators. Insolvency specialists at Kroll have been appointed to oversee the process and they are hoping to strike a rescue deal for the business. It is understood the company has fewer than 100 employees.
Supreme, the London-listed vaping products and drinks manufacturer, told shareholders that rescue talks over Typhoo Tea are at “an advanced stage” but it is not certain a deal will be completed.
The move would be part of efforts by Supreme to grow its drinks and nutrition operations, as it reduces its focus on vaping before a government clampdown on disposable vapes due next year.
Supreme said: “The board can confirm that it is currently participating in a process regarding the potential acquisition of Typhoo Tea.
“Whilst discussions with the administrators are now at an advanced stage, there can be no certainty that the potential acquisition will be completed. No final terms of the potential acquisition have been agreed but the company can however confirm that any potential offer would be funded by Supreme’s existing bank facilities.”
Typhoo was launched in 1903 by a Birmingham grocer, John Sumner Jr. The business is controlled by Zetland Capital, a private equity firm, which took a majority shareholding in Typhoo from Apeejay Surrendra Group, one of the largest tea producers in India. The company has struggled with sales in recent years as Britain’s tea consumption declines.
The loss-making tea company had been attempting a turnaround which included an overhaul of its supply chain and staff reductions. However, it suffered a setback last year after a group of trespassers caused significant disruption to its business by breaking into its site in Moreton, Merseyside.
Typhoo has not been in the black since it reported a pre-tax profit of £220,000 for the financial year 2017. Since then, the business has reported combined pre-tax losses of more than £100 million.
The tea company reported revenues of £25.3 million for the year to September 30, 2023, down from £33.7 million during the same period a year earlier, according to the most recent accounts.
Typhoo’s pre-tax losses widened to £38 million in the 12-month period from £8.5 million the previous year. The business also reported exceptional costs of £24.1 million in the 2023 financial year, a large portion of which was due to damage from the site break-in.
A spokesman for Kroll said Typhoo Tea “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.”
Supreme was founded in 1975 by GS Chadha. Since then, the Manchester-based business has grown to become a supplier of products ranging from Elf Bar vapes to Duracell batteries. The company floated on Aim, London’s junior market, in 2021. Supreme is now led by Sandy Chadha, who bought the business from his father in 2003.
Shares in Supreme fell 5½p, or 3.2 per cent, to close at 168½p.
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