Irn-Bru maker AG Barr yesterday warned that soft drinks deflation could take the fizz out of profits despite posting a sparkling set of annual results.
The Cumbernauld-based firm said the industry was going through a period of falling prices which will make it more difficult to grow its bottom line.
Barr pointed to figures from data firm Nielsen showing that soft drinks prices declined at the end of last year, with volumes falling by 0.2 per cent and the market value lifting by just 0.4 per cent over 12 months.
The company, which also makes Tizer and Rubicon, said it expects the market to remain “challenging”.
However, yesterday it said its pre-tax profits lifted 10 per cent to £41.9m in the year to January 25, as all its core brands grew during the period.
The firm added that although the new financial year had begun slowly due to tough comparatives the management was confident it could “unlock significant potential” over the period.
The business said Irn-Bru sales grew last year by 1.6 per cent, with a strong contribution from its Sugar Free variation. It added sales of Irn-Bru ice cream were just under £1m during the year.
Sales of the drink in the North East, Lancashire and Yorkshire regions lifted by 5.6 per cent, the group said, adding it planned to boost distribution across England and Wales in 2015.