Britvic annual profit dives 31pc on France weakness
Britvic on Wednesday posted a 31pc drop in its annual profit after tax, as the British soft drink company grappled with a new law in France and wrote down the value of some assets in the country.
The company, whose brands include Tango, J2O, Fruit Shoot and Teisseire, said its profit after tax dropped to £80.9m (€94m) for the year ended September 30 from £117.1m (€136.6m) last year, as the company booked a revaluation charge in France.
The group also experienced “a more challenging year” in Ireland, compared to a strong performance following an exceptionally hot summer in 2018.
Britvic experienced a “softer performance” in the water and full sugar carbonates categories here.
In November, Britvic announced the sale of its French private label juice business, largely responsible for its underwhelming performance in France, as well as three manufacturing sites and its Fruité brand.
Britvic's performance in France, where it has historically underperformed, was also dented by the introduction of the EGalim law.
The law was put in place to rebalance commercial relationships between smaller suppliers and retailers by regulating both promotional activity and margins.
"It has been a challenging year in France, with performance particularly disappointing in the second half of the year, as both the private label and branded business performed below expectations," Britvic said, adding that the introduction of the law had a "major impact".
Adjusted operating earnings, however, rose 4.4pc to £214.1m, lifted by sales of Britvic's low sugar and fruit-based beverages.
The company, which competes with A.G.Barr and Fevertree Drinks, has made a shift towards healthier alternatives after Britain in 2018 levied a tax to curb sugar levels in beverages in an attempt to fight obesity.
British Prime Minister Boris Johnson had earlier pledged to review salt and sugar taxes, but with the December election swiftly approaching, a potential Labour Party government could bring some uncertainty.