Irn Bru Maker Cuts Back On Sugar Ahead Of Tax

Irn Bru maker AG Barr said it was substantially reducing the sugar content of its drinks as it weighed the impact of new tax measures set to hit the industry.

The Scottish-based company's decision came as it reported a fall in annual revenues.

Barr said it expected up to a third of its product portfolio to be affected by the sugar tax - but hopes the strength of its brands and changes to products will help minimise the financial impact.

The firm said it was shifting focus to "no sugar" and "low sugar" products.

Chancellor George Osborne said earlier this month that from 2018 the Government would introduce a levy on soft drinks based on their sugar content, amid the growing problem of childhood obesity.

Barr, whose brands also include Tizer, Rubicon and Strathmore Water, has previously described the proposals as "extremely disappointing".

It (Other OTC: ITGL - news) set out a further response as it published latest financial results showing pre-tax profits up 7% to £41.3m, largely thanks to cost cutting.

Annual revenues were down 1% to £258.6m for the year to 30 January amid a struggling UK soft drinks market.

Chief executive Roger White said conditions were "not expected to substantially change as we look forward".

He added: "To ensure success in the UK market we are focusing our marketing efforts on our 'lower' and 'no' sugar products and are substantially reducing the sugar content of our portfolio to reflect consumers' changing preferences."

Mr White said the company had already been cutting back on high-sugar products and that it was "playing an important part in addressing the complex and very important UK consumer health issues".

On the sugar tax measures he said Barr believed "ongoing product reformulation and consumer driven innovation will allow us to minimise the financial impact on the business".

He added: "Based on the Government's currently proposed metrics, should a levy be introduced, we expect at least two thirds of our portfolio will be lower or no sugar, and would therefore be levy-free at that time."