PG Tips owner Lipton Teas & Infusions UK has slumped to a loss after falling sales and heavy investment in promotion constricted its profit margins.
The tea group’s sales fell by 15.1% to £94.8m in 2025, as the business lost volume share in an already shrinking category.
Efforts to revitalise sales, including a “decisive step” to cut prices, put further pressure on margins. The group also made significant marketing investments, including the first major rebrand for Lipton in a decade and the revival of PG Tips’ Monkey mascot.
LTI accordingly fell to an operating loss of £2.1m for the year to 31 December 2025, having made £6.2m in profit the year before. The company’s pre-tax loss came to £713k.
“Our 2025 results reflect a series of deliberate choices to strengthen the long-term competitiveness of our business and brands in what has been, and continues to be, a challenging market,” LTI UK&I general manager Jonny Briscoe told The Grocer.
“Early in the year, we took the decisive step of repositioning the brand and making it more accessible to consumers. Together with inflationary pressure on the cost of goods, this affected gross margin and short-term profitability.”
But the year also saw the launch of Lipton branded tea on to UK shelves, and capex on “tools and technology needed to create a simpler, more efficient and scalable organisation”.
The business saw the benefit of its investments at the end of 2025 and start of 2026, with increased penetration and stabilising volume share, Briscoe said.
Till sales figures for the period showed a mixed performance between LTI’s brands, however, with PG Tips volumes falling 2.2% despite price cuts. Sales volumes, meanwhile, jumped 4% at Pukka [NIQ 52 w/e 13 June 2026].
The group has continued to invest into 2026, with new product development focused on the Pukka brand – launches this year included a trio of powdered matcha SKUs and caffeine-free, wellness-oriented blends to tap into functional drinks trends.
“Looking ahead, we remain focused on delivering the quality, taste and value consumers expect, while continuing to invest in our brands, innovation and the capabilities needed to support sustainable growth,” said Briscoe.
“We continue to benefit from strong group and investor support, giving us the confidence and capacity to make the right investments for the long term.”
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