Vimto is safe af­ter Brexit, even with ris­ing de­mand

The Daily Telegraph - Business - - Business - By Oliver Gill

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.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.