Irn Bru maker AG Barr to reduce focus on sugary drinks ahead of tax

Posted on 26 Apr 2016 by Tim Brown

Irn Bru maker AG Barr has announced that will substantially reduce the amount of sugar in its drinks ahead of the introduction of the proposed sugary drinks tax proposed by the Chancellor.

Cumbernauld-based AG Barr said it expected up to a third of its current product portfolio to be affected by the sugar tax but said that it hoped the strength of its brands and changes to products will help minimise the financial impact.

AG Barr, which also produces Tizer, Snapple, Rubicon and Strathmore Water, has joined other soft drinks makers including Pepsi and said that it will shift its focus to “no sugar” and “low sugar” products and would be guided by consumer-driven innovation.

“To ensure success in the UK market we are focussing our marketing efforts on our “lower” and “no” sugar products and are substantially reducing the sugar content of our portfolio to reflect consumers’ changing preferences,” AG Barr said in a statement.

Sugar down for the count

AG Barr has already reduced the average calorie content of its portfolio of products by 8.8% over the last four years, it said, and said it expects to accelerate the pace of change over the next year.

Soft drink makers can use ingredients including sweeteners like aspartame and stevia to replace sugar and can also redice container sizes to control calorie counts.

Chief executive, Roger White, said the reductions were “playing an important part in addressing the complex and very important UK consumer health issues”.

The FTSE 250 firm last month reported a 7% rise in pre-tax annual profit to £41.3m, although it said sales had fallen just under 1% to £258.6m.

According to the Belfast Telegraph, some members of the soft drinks industry are considering taking legal action against the Government through European courts on the basis that other types of food and drink, such as fruit juice and milkshakes, are not included. Similar taxes in Scandinavia have been successfully challenged but AG Barr has said it does not plan to participate in any legal action.