The head of Britvic’s Irish operations said the soft drinks manufacturer is unlikely to be negatively affected by the introduction of next year’s sugar tax.
Speaking on the back of a strong set of full-year results for the company and the announcement of further growth through acquisition, Britvic Ireland managing director Kevin Donnelly yesterday said if the levy was introduced today, as a carbon copy of the model imposed in the UK, two-thirds of Britvic Ireland’s products would be tax-exempt. Currently, 60% of Britvic Ireland’s sales are in the low and no sugar segment.
Mr. Donnelly did, however, note concern over the combination of the sugar tax and volatile exchange rates provoking a pricing gap between imported product and domestically-produced goods.
While it has weathered many a stormy year since entering the Irish market via its 2007 takeover of C&C’s soft drinks arm, Britvic Ireland has turned the corner in recent years; partly by cutting costs through downsizing and centralising producton, but also via evolving its product offering.
Yesterday’s results – covering the 53 weeks to October 2 – showed a 9.4% rise in annual revenues to £131.7m (€154.2m) and 3.6% volume growth.
The company has grown revenues in seven of the last eight quarters, here, and the last six in a row.
“Sales of new products were up 30% on the previous year. We have been reformulating our core products [regarding sugar content] and innovating in the areas of low and no sugar,” said Mr. Donnelly.
While stressing there remains plenty on offer for sugar lovers, he said Britvic’s portfolio is evolving to meet changes in consumer habits.
“We offer choice and respond to consumer trends, which is a very solid formula for growth.” Britvic Ireland’s portfolio amply reflects how consumer habits are changing. MiWadi now comes in full-sugar, no-added-sugar, and artifical sweetner modes, while Ballygowan water contributed more growth to the Irish soft drinks sector than any other brand last year. Ballygowan’s performance in the UK has been hampered, slightly, since sterling’s post-Brexit referendum weakening, however.
Britvic is also set to become the second largest licensed drinks wholesaler in Ireland – yesterday announcing agreement to buy East Coast Suppliers in a deal which requires competition approval.
On a group-wide basis, meanwhile, Britvic yesterday reported a 10.3% rise in annual net profit to £114.5m, with revenues up 0.4% at £1.43bn.
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