Sainsbury’s is to end its tea supply contract with Finlay Beverages after more than 100 years in a move that will see rivals Spicers and Ringtons take over the supply of the much-loved Red Label brand.

Finlay, which helped Sainsbury’s founder John James Sainsbury develop Red Label in 1903, has lost the contract to supply the retailer with all its own-label teas, including what is now Sainsbury’s biggest-selling own-label line. As well as being one of Sainsbury’s longest-serving suppliers, Finlay was key to helping the retailer switch all its own-label tea to Fairtrade in 2007. Although it will stop supplying Sainsbury’s with tea in March 2012, it will still supply Sainsbury’s with own-label Fairtrade ground and roast coffees.Finlay, which recorded a 1.5% increase in sales to £51.1m in the year to 2 January, said it was actively seeking new contracts and had already secured a number of smaller contracts. Earlier this year it won a contract to supply BA with roast and ground coffee. It also supplies other multiples, including Asda and The Co-op, and won Asda Private Label Supplier of the Year 2011 in March.A Sainsbury’s spokeswoman said: “Our priority is to meet customer needs for high-quality, tasty, good value products. We’ve had a long and successful relationship with Finlay Beverages, so this was not a decision we took lightly.”The win for Spicers comes just 10 months after it was acquired by US-based Harris Tea. At the time, vice chairman Gilbert Zaris said he wanted to stir up excitement in the UK own-label tea market.