UK soft drinks producer, AG Barr has announced "disappointing" first half results and saw its shares drop 10% this week.

Pre-tax profits for the six months to 28th July 2001 plunged almost 25% to £5.72m in spite of a 2% growth in turnover.

Robin Barr, chairman of AG Barr, makers of Irn-Bru, Tizer and Orangina said the fall in profits was due in part to reduced margins caused by increased competition in the sector, which had an adverse impact on prices. Pricing was also affected by the continuing availability of grey market imports of rival soft drinks.

Scotland's poor summer weather has also been blamed for the slump in profits.

AG Barr, which is second in sales only to Coca-Cola in Scotland, sees no immediate answer to the problems either. "Pricing has continued to be weak compared to a year ago. It seems likely that this situation will continue at least until the spring of next year," a company statement said.

However Barr did say that on a positive note sales of the Irn Bru brand had gone well in England where a double-digit percentage increase in volume sales "provides a strong platform for further progress towards our ambition to create a genuine national soft-drinks brand."

Earlier this year there had been speculation the company was bidding for UK based soft drinks producer, Britvic, with a £500m bid backed by venture capitalists 3i.

But with the second round of bidding now underway, the Scotland based company is believed to be looking at a much smaller acquisition of some Britvic brands, which maybe surplus to requirement under new ownership.


The Market for Soft Drinks in Western Europe
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