Irn-Bru maker axes 55 Scots jobs
AG Barr criticises sugar tax and forecasts further Brexit fallout
IRN-BRU maker AG Barr has revealed plans to axe 55 jobs north of the Border as it announced a drop in sales.
The Lanarkshire-based firm also criticised the Government’s “punitive” sugar tax and talked of a “significant weight of negative media coverage” of sugary drinks.
The company, which also makes Tizer and Snapple, revealed it is taking action to reformulate drinks in advance of the Government’s new levy coming into force.
The drinks firm also forecast the Brexitvotewouldcostthegroup between £3 million and £4m in 2017 with the falling value of the pound increasing its import costs.
The contentious sugar tax, proposed by former chancellor George Osborne last March to combat child obesity, “will be very complex, expensive and difficult to implement”, said the business that launched new-recipe sugar-free Irn-Bru and Rubicon drinks earlier this year.
The job losses come as part of the Cumbernauld soft-drink maker’s restructuring plans that aims to save £3m a year. And it estimated the one-off cost of the reorganisation at £4m.
The axing of 10 per cent of its workforce – about 90 job losses across Britain– will target AG Barr’s commercial, central office and departments.
In March, the firm announced a rise in annual pre-tax profits of seven per cent and said the financial impact of the proposed sugar tax would be minimised by its brand strength, product reformulation and innovation.
AG Barr says it hoped to avoid the “sugar tax”, due to be introduced in April 2018. The firm says it is on track to ensuring two-thirds of its products would either contain no sugar or low sugar by the time the levy is launched.
The firm has revealed revenue supply chain slid from £130.3m to £125.6m in the first half of the year to the end of July. Profits, however, rose from £16.9m to £17m.
But the firm remained heavily critical of the proposed sugar tax.
In a statement, it said: “We believe this proposed tax is a punitive and unnecessary distortion to competition in the UK market which will be very complex, expensive and difficult to implement.
“We believe our positive actions and sugar-reduction progress, along with those of many of our competitors within the soft drinks industry, make the implementation of a soft drinks only sugar tax an unnecessary measure in the context of Government health policy objectives.”
Chief executive Roger White said it was a “solid” performance despite a decline in demand and poor weather in the early summer.
AG Barr said the organisational changes were likely to affect 10 per cent of its staff. A spokesman added: “Subject to consultation, we expect the majority of the changes will be implemented before the end of the current financial year.”