Typhoo Tea’s new owner said it was “strangled” by debt under its previous private equity owners, as it pledges to turnaround the UK’s oldest tea brand.

Vape firm Supreme acquired Typhoo Tea in a deal worth £10.2m yesterday (2 December) after the tea maker fell into administration last week.

It came after a tough year for Typhoo Tea which saw sales plunge 26% to £25m in 2023, compared to £34 the previous year. Losses during the period also shot up to £38m from £9.7m in 2022 and debts hit almost £70m.

Supreme chief executive Sandy Chadha told The Times that there had been “too much debt on the business in the past, which strangles your business.”

He added that the business struggled after its acquisition from previous owner London-based private equity firm Zetland Capital, which acquired Typhoo Tea in 2021, as the takeover landed the firm with millions of pounds of debt.

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“This is a business that’s not made any money, so how do you support £25 million-plus debt? How do you support that unless you’re generating any cash?”, Chadha said.

Supreme said the acquisition of Typhoo Tea will allow it to further accelerate its broader diversification strategy, bringing non-vape annualised sales to over £120m, and will widen the company’s UK retail network, adding more high street names including Holland & Barrett which it said could generate sales opportunities across multiple categories and product areas.

Chadha told the title that looking ahead: “The tea market is declining, but the iced tea market is increasing significantly. We’ve not made any decisions, but does the brand lend itself to iced teas in the summer?”

Following the acquisition, he added: “Having established our soft drinks division earlier in the year, we believe the addition of Typhoo Tea and its highly complementary blend of great value and premium tea brands, creates tangible cross sell and product innovation opportunities in the near-term, alongside avenues into credible UK retailers that Supreme has been looking to partner with.”