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Typhoo Tea is set to appoint administrators as the 120-year-old brand's sales collapse, losses widen and debts mount.
The company has filed a court notice “which gives it some breathing space to explore solutions”, Typhoo chief executive Dave McNulty told the BBC.
The company has been trying to recover for some time.
However, the company suffered a setback after intruders damaged its former factory in Moreton, Merseyside, last year.
“Given the sensitive nature of this matter, we are unable to comment further,” Mr McNulty said.
He added that the “notice of intent” is to appoint accounting firm EY to manage the process.
“This does not mean we are under administration,” he said, adding that it was “an ongoing confidential process.”
The company's losses widened to £38 million, compared with £9.6 million in the year to the end of September 2023, which are the most recent results available. Sales fell to £25.3m from £33.7m.
Typhoo Tea, headquartered in Bristol, was founded in 1903 and is widely regarded as one of the UK's leading tea brands, alongside PG Tips, Tetley's and Yorkshire Tea.
Typhoo is majority owned by private equity firm Zetland Capital.
It was controlled by the Indian conglomerate Apeejay Surrendra Group, which bought the company from Premier Foods in 2005.
Apeejay Surrendra sold its shares to Zetland in 2021.
“Significant damage”
The findings also revealed “exceptional costs” worth £24.1 million, some of which relate to the break-in at the Moreton factory, which was closed last year.
Typhoo said: “During August 2023, a group of organized intruders broke into the Moreton site and occupied it for several days. »
He adds that the intruders caused “significant damage” and made the site “inaccessible”.
She said much of the tea had become unusable and she was unable to fulfill some customer orders.
The threat of administration comes just two months after the company overhauled its brand with “Fear Free Tea,” a campaign highlighting violence and abuse in the tea supply chain.
It said it does not guarantee that its own product is “fear-free” but that it “invites the tea industry to question and evaluate whether its teas are free from sexual violence.”
The BBC Panorama 2023 documentary Sex for Work: The True Cost of our Tea found that three in four women interviewed on tea plantations had suffered sexual abuse.
