Soft drink producer Clearly Canadian Beverage Corporation has reported a net loss from continuing operations for 2003 of US$3.876m, compared to a net loss of $3.825m last year, as distribution changes disrupted brands sales.

The company's sales revenues reached US$13.270m, compared to US$20.205m for the year ending 31 December 2002. The year-over-year decrease in revenue was attributed to a decrease in sales of both the Clearly Canadian brand and the company's licensed Reebok products, partially offset by an increase in private label business.

In 2003, the company made changes to its network of distributors for the Clearly Canadian brand in key regions of the US.

"Changes to these new networks did, however, result in transitional interruptions in sales for the brand, contributing to the decrease in total core brand sales for the year," the company said in a statement.

"As well, within the beverage industry, the effects of unseasonably cooler weather conditions in key spring and summer selling periods in the US adversely affected beverage sales generally in 2003. The company also attributes the decline in sales to a challenging year with respect to available working capital, which contributed to limiting certain marketing and sales programs."

The company also said that Total Reebok fitness water beverage sales were down by 70.3% in 2003 compared with 2002. Clearly Canadian blamed the introduction of brands represented by the major carbonated soft drink suppliers in the segment that enjoy certain distribution advantages over smaller competitors.

As a result of these distribution challenges, which resulted in sales of Reebok fitness water failing to meet specific minimum sales criteria in the company's license agreement with Reebok, the sportswear company elected not to renew its licensing agreement with Clearly Canadian to manufacture, distribute and sell Reebok products in the US.

In a statement Douglas L. Mason, president and CEO of Clearly Canadian, said: "This year, we continued to make significant progress in strengthening our existing distributor relationships and establishing important new alliances throughout North America. We believe that the company has been successful in achieving a more effective and focused network of distributors in several key regions for brand Clearly Canadian.

"While sales revenues declined in 2003, the company is very encouraged with the commitment displayed by its new distribution partners and we believe these improvements will result in increased sales for 2004 and beyond."