A.G. Barr says 99% of portfolio will escape UK sugar tax
The company had announced in March it wanted 90% of its portfolio to move to low/no sugar by the time the tax is introduced in April: today it anticipates ‘up to 99%’ will contain less than 5g of total sugars per 100ml (the threshold at which the UK’s levy on sugar-sweetened beverages will kick in).
A.G. Barr has reformulated its flagship IRN-BRU carbonated drink, releasing a new version with 50% less sugar this month. The amount of sugar per 100ml has been reduced from 10.3g to 4.7g, replacing some of the sugar with aspartame and acesulfame K, and reducing the calorie count to 20 calories per 100ml (66 calories per 330ml can).
Last year the reformulation annoucement created a backlash among some loyal IRN-BRU drinkers: A.G.Barr, however, says that response to the new recipe has been encouraging.
“As anticipated, the sugar reduction in regular IRN-BRU in early January 2018 was met with widespread media interest. Our extensive research and testing in the preceding years gave us confidence that we had an excellent taste match and, whilst it is still early days, the consumer response to the new product has so far been encouraging.”
In recent years A.G. Barr has also launched a low calorie version IRN-BRU XTRA and IRN-BRU Sugar-Free (both also sweetened with acesulfame K and aspartame).
Releasing its trading update for the financial year ending January 27, 2018, A.G. Barr reported a 7.5% increase in total revenue to £277m ($394m).
“This positive revenue performance reflects the continued success of our innovation alongside strong trading execution across our core brands. It is pleasing that we have continued to outperform the total UK soft drinks market and increased our overall market share,” says a statement from the company.
However, it warns 2018 will be ‘another challenging year’ for UK businesses because of continued uncertain economic conditions.
“In addition the soft drinks industry faces significant changes in regulation, customer dynamics and consumer preferences, bringing both challenges and opportunities.”
UK sugar tax: Reformulation responses
Lucozade Ribena Suntory has also reformulated one of its flagship brands - Lucozade Energy - to contain 50% less sugar: as well as reformulating across the portfolio to ensure all drinks contain less than 5g of sugar per 100ml.
Coca-Cola Great Britain anticipates that 60% of its portfolio will escape the sugar tax.
Britvic says 72% of its portfolio will be exempt from the levy.
The UK's soft drinks industry levy will come into effect in April. Added sugar drinks with a total sugar content of 5g or more per 100ml will be set at 18p per liter; and those with 8g or more per 100ml will be set at 24p per liter.