Scottish soft drinks maker AG Barr
has said the financial impact of the proposed sugar tax will be
minimised by its brand strength, product reformulation, and innovation.
The
Cumbernauld-based company, whose brands include Irn Bru and Rubicon,
has published its final results for the year to the end of January 2016.
Statutory pre-tax profits were up 7% to £41.3m.
The firm said "brand loyalty" would continue to drive demand.
Chancellor
George Osborne outlined the details of the proposed tax on sugary
drinks, to be introduced in 2018, during his Budget two weeks ago.
The proposed tax will be levied in two bands:
- A higher band for the most sugary drinks with more than 8g per 100 millilitres - adding 8p to the price of a can
- A lower band for drinks above 5g per 100 millilitres - adding about 6p to a can or bottle
- Pure fruit juices and milk-based drinks are exempt
Chief executive Roger White said: "Although the details of the
chancellor's proposed soft drinks levy are still to be consulted upon,
we believe our combination of brand strength, ongoing product
reformulation and consumer-driven innovation will allow us to minimise
the financial impact on the business at the proposed point of
implementation in April 2018.
"Based on the government's
currently proposed metrics, should a levy be introduced, we expect at
least two-thirds of our portfolio will be lower or no sugar, and would
therefore be levy-free at that time."
'Difficult market conditions'
He
added: "For the balance of our portfolio, which would attract a levy,
we anticipate that brand loyalty and consumer preference will drive
continued demand.
"We will, of course, play an active role in the
consultation between the government and the soft drinks industry on the
proposed levy, and are fully committed to working towards an outcome
that benefits consumers, shareholders and other stakeholders."
The
company's net revenue was £259m down slightly from the £261m figure for
2015 but its international business volume grew by 40%.
Mr White
said: "We have delivered a creditable financial performance in difficult
market conditions over the past 12 months through continued tight cost
control, rigorous cash management, executional improvement and further
investment in our brands, assets and people."
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