Drinks industry reacts to coronavirus impact

By James Ridler contact

- Last updated on GMT

The drinks industry has been directed impacted by the ongoing COVID-19 situation
The drinks industry has been directed impacted by the ongoing COVID-19 situation

Related tags: coronavirus, Drinks

Cut earnings, threats to supplies and helplines for manufacturers’ customers are just some of the latest developments in the drinks industry as a result of the ongoing coronavirus pandemic.

Britvic has announced it expects a material impact to its revenue and earnings for the 2020 financial year thanks to the coronavirus.

With the impact of out-of-home closures, restrictions on movement and the strain on the supply chain from lack of stock and potential site closures, the manufacturer predicted a loss of £12m to £18m in earnings before interest, tax and amortisation per calendar month.

The above figures included a number of actions taken by Britvic to mitigate the profit impact through cost control and reduced discretionary spend across the business.

Britvic’s financial outlook

Commenting on the financial outlook of the company, chief executive Simon Litherland said: “Britvic starts from a strong financial position and we are taking further action to protect our cash flow and profitability.

“Our brand’s consumer appeal is enduring in good times and bad, and we are confident in our ability to bounce back strongly as normality returns. The long-term investment case for Britvic remains intact.”

Financial stability was an ongoing concern for producer AG Barr as well, which has delayed the publication of its financial results as per the Financial Conduct Authority’s request.

To combat the evolving situation surrounding COVID-19, the drinks manufacturer has frozen all new capital projects and is reviewing all existing projects, as well as scaling back immediate marketing and commercial activity where sensible across the group. 

Supplies of raw materials that are not possible to store on-site are a continuing concern for the manufacturer, which has so far been mitigated by a healthy supply of finished goods at AG Barr’s Cumberland and Milton Keynes facilities.

Support from Diageo

Aalcoholic drinks giant Diageo has launched a range of support for its out-of-home customers that have been the worst-hit by the coronavirus.

The company planned to help support smaller retailers, pubs and bars by providing flexibility on order size and allowing smaller customers to manage their inventory. These measures will be applied across Diageo’s total trade customer base in a bid to help customers access product more easily and manage their cash flow.

Diageo has also launched a dedicated helpline for on-trade businesses that need guidance on how to cope with coronavirus developments.

Dayalan Nayager, managing director for Great Britain, Ireland, France & Europe e-commerce, added: “The British drinks trade is facing one of its most challenging times ever and we want to help our communities when they need us most.

“We all need to come together to support the trade and I would urge all my fellow drinks producers to do what they can to help our British pubs, bars and retailers and restaurants over the next few months.”

Food manufacturers have been urged to mitigate any risks with the coronavirus COVID-19 outbreak.

The advice comes as the Government has moved to reassure the public that there will be no food shortages in the wake of the spread of coronavirus. 

Meanwhile, Government calls for the public to avoid hospitality business could have an unprecedented”​ effect on drinks suppliers.

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