The vape and beverage distributor Supreme has successfully acquired Typhoo Tea for £10.2 million following its administration proceedings.

Founded over a century ago, Typhoo Tea sought administrative assistance last week after failing to reach a deal with creditors to settle its debts.

This acquisition promises to revitalize the brand after its operations were hindered by declining tea sales and a break-in at its Merseyside facility last year.

Sandy Chadha, CEO of Supreme, stated, “The procurement of Typhoo Tea is a pivotal milestone in our extensive diversification plan, bringing one of the UK’s most renowned consumer brands into the Supreme portfolio.”

He also highlighted that the partnership will enable Typhoo to leverage “Supreme’s extensive market presence and proven ability to foster brand loyalty.”

This purchase aligns with Supreme’s strategy to expand its beverage and nutrition segments as it shifts focus away from vaping in anticipation of government restrictions on disposable vapes set to take effect next year.

The acquisition of Typhoo Tea is part of Supreme’s initiative to balance its revenue streams, forecasting that non-vape sales could account for 50 percent of the overall revenue. Earlier this year, Supreme launched its soft drinks division and acquired Clearly Drinks’ parent company, Acorn Topco, for £15 million in June.

Typhoo Tea was established in 1903 by grocer John Sumner Jr. Currently, it is managed by Zetland Capital, a private equity firm that acquired a controlling stake in Typhoo from India’s Apeejay Surrendra Group, one of the leading tea producers.

In recent times, Typhoo has faced declining sales as tea consumption in the UK decreases.

The company has made attempts at a turnaround, which involved workforce reductions and a restructuring of its supply chain. Nonetheless, it encountered difficulties last year when trespassers caused major disruptions by breaking into its site in Moreton, Wirral.

Typhoo has not reported a profit since the 2017 financial year, which saw a pre-tax income of £220,000. Since then, it has accumulated more than £100 million in combined pre-tax losses. The latest financial report indicates revenues of £25.3 million for the year ending September 30, 2023, a decrease from £33.7 million registered for the same period the previous year.

Pre-tax losses for Typhoo increased to £38 million in the most recent year, compared to £8.5 million the prior year, with exceptional costs of £24.1 million largely attributed to damages from the break-in.

Supreme has conveyed its confidence that Typhoo Tea will seamlessly integrate into its existing operations without affecting customer service or operational continuity.

Founded in 1975 by GS Chadha, Supreme has grown from its Manchester base into a significant supplier of various products, including Elf Bar vapes and Duracell batteries. Sandy Chadha took over the business from his father in 2003, and the company was listed on Aim, London’s junior market, three years ago.