Irn Bru maker AG Barr plans to cut workforce by 10%
- 27 September 2016
- From the section Scotland business
Soft drinks maker AG Barr has announced plans to cut 10% of its workforce as part of a major reorganisation of the company.
The move, which would mean 90 job losses across its commercial, supply chain and central operations, marks the last phase of a three-year "business improvement" programme.
Barr expects to implement the cuts by the end of the financial year.
It estimated the one-off cost of the reorganisation at about £4m.
However, it added that it expected "an ongoing annual benefit" of about £3m.
The announcement came as Cumbernauld-based Barr reported a 3.6% drop in first-half revenues, to £125.6m.
Pre-tax profits were also flat at £17m, after stripping out an exceptional pension-related credit.
The company said it had been a solid first-half performance, despite a "challenging customer and consumer environment" as well as poor weather in the early summer months.
There were strong performances from parts of the business, including a 28% rise in revenue for its Funkin cocktail mixer arm, driven by distribution gains in the UK and the US.
Its international business has also saw revenue up by 16%.
AG Barr also said it had been making good progress in bringing new lower and no sugar products to the market, ahead of the UK government's proposed soft drinks sugar tax.
It added that its its most recent additions, Irn Bru Xtra and Rubicon Spring, both of which contain no added sugar, were "performing well at this early stage".
Its trading update stated: "In line with general market trends, lower and no sugar products have performed better as consumers respond to the significant weight of negative media coverage pointed towards added sugar products particularly in the last six months."
Barr said it continued to play its part in delivering an industry-wide five-year voluntary target of 20% calorie reduction by 2020.
However, it reiterated its opposition to the proposed tax.
It said: "We believe this proposed tax is a punitive and unnecessary distortion to competition in the UK market which will be very complex, expensive and difficult to implement."
The company added: "We believe our positive actions and sugar reduction progress, along with those of many of our competitors within the soft drinks industry, make the implementation of a soft drinks only sugar tax an unnecessary measure in the context of government health policy objectives."