Poor summer takes the shine off Irn-Bru results
growth at Scotland's AG Barr to a 'disappointing' minimum in the
first half, but the return of the sunshine in the latter part of
the summer bodes well for a better second half.
The picture has been pretty much the same for most beer and soft drinks companies - the poor summer weather yet again in many parts of Europe has taken its toll on results.
The latest company to make this announcement is AG Barr, the independent UK company which makes the Irn-Bru and Tizer soft drink brands, whose six-month performance was described as 'disappointing'.
Robin Barr, chairman of the Scottish company, said that the summer weather had been the worst for many years, and as a result profits had grown only slightly, from £5.7 million to £6.2 million (€9.9m), during the first half of the 2002 fiscal year.
But the weather was not the only factor to impact results at the drinks maker - it was also affected by increased competition. "Competitive pressures in the market place have remained intense and the continuing high value of Sterling has meant that the UK franchise bottlers of international brands remain under threat from imports of these brands of foreign manufacture with a consequential effect on UK pricing," Barr said.
He added that costs of production were modestly down on the same period last year with a small rise in the price of sugar being covered by a reduction in packaging costs.
Turnover for the six months rose by around 5 per cent to £62.2 million, helped by the promotions in England and Wales, which started earlier this year than in 2001, Barr said. Glasgow-based Barr has a very strong market position and image in Scotland - every Scottish student will swear by Irn-Bru as the ideal hangover cure, for example - but still has considerable work to do to build this same reputation south of the border.
Outside the UK, Barr said the appointment of the Pepsi Bottling Group as the new franchise bottler for Irn-Bru in Russia had helped give a substantial boost to export turnover, and he added that the company had been encouraged by the much wider distribution which PBG had already achieved for the brand.
As with most of the other drinks groups affected by the weather, the company said that it had already seen an improvement in the first few months of the second half, with sales for the seven weeks since 27 July up 4 per cent on the same period last year, but Barr stressed that the competitive nature of the UK market remained a challenge for the company in the second half.
"The better weather pattern immediately following the half year end has enabled us to maintain our trading position at the beginning of the second six months but the market place remains very competitive. We intend however, to continue progress during the remainder of this financial year with the development of our Irn-Bru brand in England and Wales," Barr said.
