July 24, 2018 / 6:38 AM / 2 years ago

CO2 shortage takes fizz out of Britvic's summer sales

(Reuters) - A disruption in the supply of carbon dioxide in Britain prevented soft drinks maker Britvic (BVIC.L) from taking full advantage of an unusually warm summer in Britain, as it reported a 3.4 percent rise in quarterly revenue.

FILE PHOTO: A CO2 canister is seen connected to a drinks machine in a bar in London, Britain June 27, 2018. REUTERS/Peter Nicholls/File Photo

The maker of Robinsons Fruit Shoot juice drinks said it was assessing the impact of the recently imposed sugar tax and expects to realise the levy’s full impact by the end of the year, adding that early indications were positive.

While soft drink makers in Britain are still evaluating the sugar tax, a heatwave gripping Britain has helped boost drinks sales across the sector.

However, Britvic said quarterly revenue fell 0.6 percent excluding the impact of the sugar tax in Britain. The company is also benefiting from strong sales of its non-carbonated and sugar-free drinks.

The company, which also bottles Pepsi in UK, said it had to temporarily scale back its promotional activity and reallocate some of its resources to still drinks because of a shortage of carbon dioxide.

As a result, the volume of fizzy drinks sold in Britain fell 8.7 percent in the quarter, Britvic said, while non-carbonated drinks rose 3.5 percent.

Carbon dioxide supply has now normalised, enabling Britvic to start rebuilding stock levels and gradually reintroduce promotions, the company said.

Despite the disruptions, Britvic said it still expects to meet full-year forecasts.

Shares in the company rose 2.8 percent by 0830 GMT, while premium tonic and carbonated mixers company Fevertree (FEVR.L) saw its shares soar 12 percent after it to forecast full-year results “comfortably ahead” of its expectations as UK sales of high-end gin surged.

The company said overall drinks volumes fell 4.7 percent in the three months ended July 8, while average prices rose 8.5 percent to 63.9 pence.

Britvic’s quarterly revenue rose 3.4 percent to £366.9 million.

Reporting by Sangameswaran S in Bengaluru; Editing by Amrutha Gayathri

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