AG Barr pledges to move away from high sugar drinks following Budget tax

Irn Bru maker AG Barr has said it will move away from high sugar drinks in light of the surprise sugary drinks tax proposed by the Chancellor.

The Cumbernauld-based firm said it expects “at least two thirds of our portfolio will be lower or no sugar” by the time the levy is introduced in April 2018. Around 40 per cent of the group’s portfolio currently has a low sugar content.

The drinks sector was sent reeling by the announcement of the new tax in the Budget earlier this month, which aims to raise around £520m a year to help fund sports for schools. The FTSE 250 firm, which also makes Tizer and Snapple, said its annual pre-tax profits lifted by 7 per cent to £41.3m, although sales slipped just under 1 per cent to £258.6m in a “difficult market” in the UK.

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Management at the soft drinks maker, led by chief executive Roger White, has had a number of meetings with the Treasury ahead of making its formal submission on the proposal.

Mr White has called the drinks levy plans ‘’extremely disappointing”.

He said: “Although the details of the Chancellor’s proposed soft drinks levy are still to be consulted upon, we believe our combination of brand strength, ongoing product reformulation and consumer driven innovation will allow us to minimise the financial impact on the business at the proposed point of implementation in April 2018.”

One can of Irn Bru contains around 34 grams of sugar, about 42 per cent more than the World Health Organisation’s recommended daily intake of about 24 grams for adults.

Irn Bru accounts for around 40 per cent of the group’s annual revenues.

Parts of the soft drinks industry are understood to be considering taking legal action against the Government through European courts on the basis that other types of food and drink, such as fruit juice and milkshakes, are not inclu- ded.