Typhoo Tea bought out of administration for millions

Typhoo Tea has been bought out of administration for £10.2m.

Less than a week after administrators were appointed, a buyer confirmed plans to purchase the 121-year-old business.

Consumer goods wholesaler Supreme has announced it is to be the new owner.

There will be no disruption to supply during the acquisition process, Supreme said.

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The brand has been under financial pressure in recent years due to slowing sales and rising debt. A break-in at Typhoo's former Merseyside factory in 2023 made the site "inaccessible" and caused "excessive damage".

Supply chain problems and cash flow difficulties had beset the business, its administrators Kroll said.

Changing tastes are likely to be behind the lower sales. Younger people are moving away from black tea and competition from coffee and soft drinks has further helped stall sales, according to research firm Mintel.

But revenue at Typhoo still topped £20m for the year that ended in September. Its pre-tax loss stood at roughly £4.6m.

New owner Supreme said it anticipated Typhoo would outsource manufacturing and do more with less money. It believes this can generate a gross profit margin of around 30%, with a "much reduced" overhead base.

Outsourcing had already been a part of the tea-makers' operations.

Supreme's chief executive Sandy Chadha said, "I believe Typhoo Tea will thrive under our ownership".

The collapse had been expected as Typhoo - the first pre-packaged tea brand in the UK - filed court papers saying it was preparing to enter administration.

Buyer Supreme is a distributor of products such as batteries, lighting, vaping and drinks.

(c) Sky News 2024: Typhoo Tea bought out of administration for millions