The historic tea brand Typhoo has been bought out of administration by the vapes and batteries maker Supreme in a £10m rescue deal.
The company filed to appoint administrators last Wednesday, risking the future of the 121-year-old brand.
However, the London-listed Supreme, which last week confirmed it was in talks over a rescue deal, said on Monday it had completed a deal to buy the brand.
Supreme said it would pay £10.2m to buy Typhoo, in a deal that values the brand’s stock and trade debts at £7.5m.
Typhoo has long been one of Britain’s favourite tea brands after launching in Birmingham in 1903, becoming the first pre-packaged tea sold in the UK. The company was founded by John Sumner, who created the product to help with his sister’s indigestion and named the brand after the Mandarin word for doctor.
It generated revenues of more than £25m for the year to 30 September, with a pre-tax loss of nearly£38m, including £24m in exceptional costs.
The new owner said it planned to run Typhoo on a “capital-light, outsourced manufacturing model” in an attempt to improve profits.
The administration followed several years of declining sales, mounting debts and even a break-in last year at Typhoo’s Wirral factory
In August 2023, intruders broke in and occupied the Moreton plant for several days, causing “extensive damage” to the facility and making it inaccessible.
As a result, Typhoo had to close the plant and switch production, racking up £24m of costs, including nearly £7m on property impairments.
The company is also likely to have been been hit by a fall in tea consumption in Britain, with younger consumers turning to coffee, energy drinks and newer trends such as bubble tea.
A consumer survey by Statista last year found that, for the first time, coffee had overtaken tea as the most popular hot drink with Britons, with 63% drinking coffee regularly and only 59% drinking tea.
According to the market analysts Mintel, consumption of tea is expected to fall by 8% between 2023 and 2028.
Insolvency specialists at Kroll were appointed to oversee the administration process and strike a sale deal. It is understood the business has fewer than 100 employees.
The move is part of a strategy by Supreme to expand its operations away from vaping, after buying the soft drinks business Clearly Drinks earlier this year, before a planned government crackdown on disposable vapes.
The Supreme chief executive, Sandy Chadha, said: “The acquisition of Typhoo Tea marks a significant step in our broader diversification strategy and brings one of the most iconic UK consumer brands into the Supreme family.
“I believe Typhoo Tea will thrive under our ownership, further benefiting from Supreme’s significant market reach and successful track record in creating brand loyalty, making us an ideal fit for this business.”
