Healthy consumers hit Britvic performance

Thursday, 02, Mar 2006 01:48

Soft drinks manufacturer Britvic has warned that the increasing trend towards healthy diets in the UK is hitting sales of its fizzy drinks.

Britvic, whose major UK brands include Pepsi and Tango, warned today that there had been a "weakening" in the soft drinks market since Christmas as a result of what it termed "the consumer trend towards 'better for you'".

As a result it warned that earnings in 2006 were at best likely to be at the "lower end" of market expectations, with chief executive Paul Moody hinting that performance could be worse unless the market picks up.

"If the soft drinks market shows recovery over the balance of the year as we anticipate, we remain confident of delivering earnings within market expectations, albeit at the lower end," Mr Moody said.

Nevertheless, he remained confident that Britvic's increasing focus on non-carbonated, fruit-based products such as J20 and a range of flavoured waters due to be released later this year, would enable the firm to weather the tough conditions.

"Despite the current challenging market conditions, the growth of stills and no added sugar carbonates continues to play to the strength of Britvic's existing portfolio," Mr Moody added.

Britvic announced that revenues increased by one per cent and profits before exceptionals rose by five per cent in the 12 weeks to December 25th 2005.

The news has rocked the market, with the soft drinks giant seeing more than a fifth of its share value wiped off as investors rushed to rid themselves of its shares.

Britvic shares plunged by 22 per cent by midday, but recovered slightly to 220.5 by 13:00 GMT, 53.50p down on the day.