Apeejay close to buying UK firm's tea business

The Apeejay Surrendra group is close to clinching not only Typhoo but also Premier Foods' entire tea business, comprising brands Lift and London Fruit & Herb.

The Apeejay Surrendra group chairman, Karan Paul, who is currently in London, refused to comment on the acquisition. He said, "I don't want to say anything on the issue. I really can't comment."

In a communication to London Stock Exchange, Premier Foods has confirmed that the company is in discussions with an interested party, which may or may not lead to the sale of its business, including the Typhoo, London Fruit & Herb, Lift and other associated brands. Premier added that a further announcement would be made in due course.

Premier Foods' public relations agency said the notice to the stock exchanges mentioned "an" interested buyer, which indicated that one buyer is in the fray as opposed to many buyers.

Britannia Industries was understood to be contemplating making a bid for the tea business but later opted out.

Sources in the domestic tea circles said Apeejay is the frontrunner for the deal. The move would give Apeejay a strong footing in the branded tea business. The bulk of Apeejay's tea was marketed through auctions. The group had 17 tea estates producing 25 million kg of tea.

Apeejay's CTC tea is sold under the 'Mantra' brand, while three single estates teas "" Sessa, Pengaree and Khobong "" were retailed at Harrods in London and other premium tea boutiques across the world.

The acquisition, if materialised, would be well-timed for Apeejay as most of the tea companies in the domestic market are planning to tap the fruit and the herbal segments.

Premier Foods claimed that 6.4 million cups of Typhoo are drunk every day, plus another two million cups of fruit and herb tea. In 1989, Typhoo was joined by fruit and herb tea expert the London Herb and Spice Company.

It was rebranded, repackaged and re-launched under its current brand name, London Fruit and Herb in 2000. Some of the infusions were Lemon Zester to Blackcurrant Bracer.

'Lift', on the other hand, was the company's instant tea brand and was available in both sweet and unsweetened lemon, as well as apple and peach.