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Fruit Shoot Recall Costs Britvic Up To £25m

(c) Sky News 2012

Bottlers of Robinsons Fruit Shoot have revealed ongoing problems with a new cap design will cost the firm up to £25m in lost business.

Last week Britvic (Stuttgart: A0HMX9 - news) announced a recall of its popular children's drink after the cap was deemed a "packaging safety issue".

It has since struggled to create a new cap and production will be hampered for weeks, with full capacity unavailable until the winter months.

"In addition to the previously guided cost of the consumer recall, the now extended period of absence from the market along with a restriction on available cap production capacity of up to six months results in a material financial change," Britvic said in a statement.

"We believe this will now have an impact on the group profit before tax in the region of £15m to £25m across the current and next financial year.

"This includes an anticipated impact in 2013 financial year of between £5m and £7m."

The Britvic share price plunged up to 15% on Wednesday in response to the news, taking the stock to a new year-long low.

Last week's recall also affected bottles of the spin-off Fruit Shoot Hydro, a flavoured mineral water aimed at children aged seven to 11.

Britvic said it would use an existing sports cap design as it attempts to ramp up capacity of the affected lines.

"As a result we will start to re-supply customers in six weeks, with a gradual increase to enable us to meet historic levels of demand within six months," the company said.

In May, Britvic revealed that poor weather and weak consumer sentiment had affected sales across the brand range.

In the new trading update it said: "Since then trading conditions have not improved and the group now expects to deliver a result for the current financial year that is at the bottom end of market expectations, before taking account of the impact of the Fruit Shoot recall."

A further update on the firm's results and trading will be released with the Q3 interim management statement on July 19.