CO2 shortage hits Britvic sales
Archant © 2017
Soft drinks giant Britvic says the carbon dioxide crisis which hit Britain last month left it unable to make the most of surging demand in the summer heatwave.
The Robinsons squash maker, which is closing its factory in Norwich next year, said UK sales of fizzy drinks, excluding the new soft drinks sugar tax, fell 2.9% in the three months to July 8 due to the CO2 shortage.
It said it was forced to switch promotions to its still drinks range, which saw sales rise 11.7%, stripping out the sugar tax impact.
Overall UK sales rose 8%, or 1.9% higher excluding the sugar tax, while underlying group sales fell 0.6% in the quarter.
Including the sugar tax, group revenues rose 3.4%.
The group – which also bottles Pepsi in the UK and Ireland – said CO2 supplies are now back to normal and it has started rebuilding its stock levels and launching further fizzy drink promotions.
Simon Litherland, chief executive of Britvic, said: “Whilst the industry-wide shortage of carbon dioxide held back our ability to fully capitalise on the exceptional weather in Great Britain and Ireland, we leveraged the breadth and strength of our portfolio to moderate the impact.
“Consequently, we remain confident of achieving market expectations for the full year.”
Britain’s fizzy drink shortage was caused by a raft of closures of factories producing the gas as a by-product of the fertiliser industry.
Factories normally close temporarily for maintenance in the summer, but this year too many plants across Europe shut at the same time, leaving CO2 supplies woefully short.
In its trading update, Britvic said it was unable to fully gauge the impact of the UK soft drinks sugar tax, which was introduced in April, given the CO2 shortage and the recent boost from warm weather.
It said it would have a clearer picture of the impact at the end of the year.
“Early indications remain positive for the category and Britvic, with the shift from full sugar to low or no sugar products accelerating,” it said.