Typhoo Tea is set to appoint administrators as the 120-year-old brand’s sales slump, losses widen and debts rise.

The company has filed a notice at court “which affords the company some breathing space to explore solutions”, Typhoo’s chief executive Dave McNulty told the BBC.

The firm has been trying to turn itself around for some time.

However, it suffered a setback after trespassers damaged its former factory in Moreton, Merseyside last year.

“Given the delicate nature of this we are not in a position to comment any further,” said Mr McNulty.

He added that the “notice of intent” is to appoint accountancy firm EY to handle the process.

“This does not mean we are in administration,” he said, adding it was “an ongoing confidential process”.

The company’s losses widened to £38m from £9.6m in the year to the end of September 2023, which are the most recent results available. Sales fell to £25.3m from £33.7m.

Bristol-headquartered Typhoo Tea was founded in 1903 and is widely seen as one of the UK’s main tea brands, alongside the likes of PG Tips, Tetley’s and Yorkshire Tea.

Typhoo is majority-owned by private equity firm Zetland Capital.

It had been controlled by Indian conglomerate Apeejay Surrendra Group, which bought the business from Premier Foods in 2005.

Apeejay Surrendra offloaded its shareholding to Zetland in 2021.

The results also revealed £24.1m worth of “exceptional costs”, some of which relates to the break-in at the Moreton plant, which was shut down last year.

Typhoo said: “During August 2023, a group of organised trespassers broke into the Moreton site and occupied it for several days.”

It added that the trespassers caused “extensive damage” and made the site “inaccessible”.

It said a lot of tea was rendered unusable and it was unable to fulfil some orders to customers.

The threat of administration comes just two months after the company revamped 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 assess whether their teas are free of sexual violence”.

The 2023 BBC Panorama documentary Sex for Work: The True Cost of our Tea found that three in four women interviewed at tea plantations had suffered sexual abuse.