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Last Updated: Monday, 29 March, 2004, 14:31 GMT 15:31 UK
Drinks sales 'losing their fizz'
Irn Bru logo
Irn Bru is a long-term money maker for Barr
Health worries are taking the fizz out of demand for traditional soft drinks, according to the makers of Irn Bru.

Glasgow-based AG Barr said that diet carbonates, still drinks and water products were selling more than sugar-sweetened carbonated drinks.

The firm announced on Monday that bottom line pre-tax profits in the year to 31 January rose by 13% to 13.8m.

Demand for water products grew by 19% while fizzy soft drinks, excluding cola and lemonade, increased just 3%.

Family firm

Although the British soft drinks industry is set to continue growing in the long term, anxiety surrounding health issues in the UK is likely to continue affecting trends, the company said.

Chairman Roger White said: "We will maximise these newer areas of opportunity without losing focus on the traditional products."

The family-owned firm said it had seen a strong improvement in margins across its core brands following a shake-up of its management.

Barr announced in January that Mr White - the first person outside the Barr family to run the 129-year-old firm - would replace executive chairman Robin Barr, who will continue as the company's part-time chairman.

Mr White said the business had strengthened its organisation, rebuilt margins and maintained its market position against strong competition in the last 12 months.

Healthy sales

Although trading was softer in the second half, the first half benefited from last year's hot summer, the group said.

Continued strong investment in long-term growth of Irn Bru had increased the brand's sales by 5.5%.

Health-focused brands such as Findlays Natural Mineral Water, Lipton Ice Tea and Simply Citrus brands performed extremely well during the good weather, despite being a relatively small part of the company's range.

The group said that sales of soft drinks grew by 7% during the year, with demand for water products increasing by 19%.

Mr White said the group would continue to grow its range of "alternative" soft drinks.

The company employs nearly 1,000 people across the UK including sites at Kirkcaldy, Fife and Bristol.

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