Yahoo Finance Price of Irn Bru will go up, warns AG Barr
The boss of Irn Bru maker AG Barr has warned that he expects prices to rise this year to cover the costs associated with a weaker pound.
Roger White, chief executive, said the drinks company had already attempted to reduce costs by around £3m as part of a restructuring plan but prices on some products would have to go up by around 2pc to 4pc.
AG Barr profits rose by 4.4pc to £43.1m in the year to January 28, including the cash made from the sale of its Orangina franchise, while sales slipped by 0.6pc to £257.1m. The company raised its dividend by 8pc to 14.4p.
Earlier this month the Cumbernauld-based company, which also produces Rubicon fruit juice, Strathmore Water and Tizer, announced it was cutting Irn-Bru's sugar content from 10g per 100ml to just below 5g.
The move came just days before the Budget, when the Chancellor Philip Hammond confirmed the two-tier levy of 18p on drinks with 5g of sugar per 100ml, and 24p on those with more than 8g per 100ml.
Mr White admitted that it would be disingenuous of him to suggest the move to slash the amount of sugar to below 5g was not a reaction to the Government's policy. However he stressed that the company was already targeting sugar reduction as a response to changing consumer tastes long before the policy intervention.
Mr Hammond has admitted that the Treasury will make less than it thought from the levy following an "aggressive" industry drive to reformulate sugary drinks.
Mr White said that he could not understand the Government's move to adopt a sugar tax last year, adding that it was a "soft drink tax designed to target the only part of the industry that was already committed to reformulation. It's more show than go".
In September AG Barr said that said that overall sales had dropped as customers reacted to negative media coverage about soft drinks and the sugar tax.
Mr White confirmed that a move to halve sugar across its range of drinks would not affect the "secret essence ingredient" that goes into Irn Bru, the recipe of which is only seen by three trusted employers.
