PGTips, Lyons and Lipton tea are being sold by Unilever – but what does it mean for customers?
PG TIPS and Lyons tea could be sold by owner Unilever because traditional teas are falling out of favour with the public.
The consumer goods giant said yesterday that it is reviewing its tea business - which also includes Brooke Bond, Red Label and the popular Lipton ice tea - amid a slowdown in sales as more consumers switch to the herbal variety.
According to research firm Kantar, the British tea industry is worth £667million a year, but over the last two years, demand for traditional black tea has fallen by 2.7 per cent.
In contrast, demand has risen for other types of tea, with herbal teas now worth £52million and cold infusions alone valued at £11.2million.
Possible outcomes for the tea division include a sale, partial sale, partnerships, or retention of a more focused business within Unilever.
A change of owner is unlikely to be noticed by tea lovers as they will not want to tinker with a much-loved brand.
At this stage, it is too early to say what would happen to shop prices.
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The review is part of efforts by Unilever chief executive Alan Jope to refocus the firm on fewer brands as sales and profits come under pressure.
Mr Jope said: “We are now stepping up execution against our fundamental drivers of growth.”
The announcement came as Unilever - also behind well-known brands such as Marmite, Magnum and Hellmans - reported a 33 per cent drop in profits to £7 billion for 2019.
The profits slump was after a marked slowdown in its South Asian business and weaker trading in China.
Despite the question mark over Lipton’s future, it is rated by Unilever as one of its seven highest-earning brands.
The others are Dove soap, Knorr food products, Persil/Omo washing powder, Rexona deodorant, Hellmann’s mayonnaise and Wall’s ice cream, according to the company’s website.
It also sells Ben and Jerry's ice cream.
City analyst Sophie Lund-Yates of Hargreaves Lansdown: “We think Unilever is doing the right thing by focusing on improving brand awareness, and conditions aren’t the most forgiving at the moment."
She added: “Overall though, the group has a killer portfolio of brands under its belt, and a big proportion of the world’s population uses a Unilever product every single day.
"That’s an enviable position to be in, and a reason to believe Unilever could find a way to thrive even in the midst of the consumer shakeup we’re seeing.”