Vimto is safe after Brexit, even with rising demand
BRITAIN will not run out of Vimto under any Brexit scenario because key ingredients are sourced at home, executives at the soft drink’s owner Nichols have said.
“All of our products are produced here in the UK, so we don’t rely on imports,” said finance chief Tim Croston.
The comments came amid burgeoning British demand for Vimto and other Nichols drinks. UK sales rose 12.6pc to £115m in the year to Dec 31, figures the company called “an excellent performance”. Investors agreed, sending shares up 8.3pc to £15.60.
Nichols’ portfolio of drinks is below the sugar tax threshold, with the company gradually reducing sugar content to avoid a customer backlash against a dramatically different taste. Last summer’s record heatwave and better supplier deals with Morrisons and Asda helped lift 2018 sales.
While Nichols is going from strength to strength at home, it struggled in the Middle East, where drinks such as Vimto are arguably better known than in Britain. The ongoing conflict in Yemen contributed to sales across the region falling from £13m to £9.6m.
Vimto’s sweetness and strong flavour is sought after when those observing Ramadan break their fast, which lasts from sunrise to sunset during the holy period. Roughly 80pc of Middle East sales are made during the holy month.
Nichols sources UK ingredients from wholesalers such as Princes. While executives insisted this insulated the company from sourcing concerns, it is still exposed to increases in raw product costs, which are often denominated in US dollars or euros.
“Our biggest risk is if we saw a significant devaluation in sterling,” said Mr Croston.
Total annual sales rose 6.9pc to £142m. Approximately 2pc of international sales are made to the EU with the majority of overseas revenues of £27.4m generated in either the Middle East or Africa.