Typhoo Tea has entered administration but a buyer could already be poised to take over the struggling firm.
Administrators were appointed on Wednesday to the more than 100-year-old tea brand but a potential buyer has already emerged.
Consumer goods wholesaler Supreme announced its takeover discussions were “at an advanced stage” but cautioned “there can be no certainty” the purchase will take place.
Money latest: The least affordable towns to buy a home
The collapse was expected as Typhoo filed court papers two weeks ago saying it was preparing to enter administration.
Typhoo experienced supply chain disruptions and difficulty with cash flow, administrators Kroll said.
Sales had been falling and debts were rising over the past few years. Last year it made a £38m loss while sales fell by a quarter to £25.3m.
Read more from Sky News:
Direct Line shares soar as it rejects takeover offer
Latest sign car industry is struggling
‘Name and shame’ compromise by City watchdog
Britons increasingly favour coffee over tea, according to industry analyst Mintel. It projected an 8% decline in tea consumption between 2023 and 2028.
Typhoo faced further difficulties when its former Merseyside factory was broken into and occupied in August 2023 which made the site “inaccessible” and caused “excessive damage”. The plant was eventually sold in 2024.
The company has been exploring a sale of the business and assets, Kroll added, a process which is “in the process of concluding”.
The current administration process provides Typhoo with protection, the administrators said, allowing time for a sale to be finalised.
Possible purchaser Supreme is a wholesale distributor of products such as batteries, lighting, vaping and drinks.