Marketing

On-trade slump leads to “challenging” H1 Britvic performance

Bottled water in pubs and offices here had been a big element of Britvic's business so the company's Irish operation also suffered from Lockdown, according to a spokesman for Britvic Ireland on publication this morning of Britvic's Interim results for the six months to the end of March this year.
Britvic Ireland's revenue declined due to trading and mobility restrictions, which severely limited sales to the on-trade as well as on-the-go consumption of smaller pack formats, states the company.

Britvic Ireland’s revenue declined due to trading and mobility restrictions, which severely limited sales to the on-trade as well as on-the-go consumption of smaller pack formats, states the company.

Britvic plc has not broken out the Britvic Ireland’s figures separately this year. Instead, they’ve been included under Rest of World.

But Britvic’s Chief Executive Simon Litherland states in his review of the half-year to the 31st of March that “Performance in Ireland was particularly challenging, where lockdown restrictions have heavily impacted the pub sector and limitations on local travel have resulted in lower ‘on-the-go’ sales.

In Ireland, revenue declined due to trading and mobility restrictions, which severely limited sales to the on-trade as well as on-the-go consumption of smaller pack formats, states the company.

“We announced in February the closure of the Counterpoint wholesale business, as part of our strategic goal of improving profitability. The closure means we will no longer act as a wholesaler to the trade and sell low-margin third-party brands and have instead signed distribution agreements to ensure our brands remain widely available across the on-trade.”

With 44 staff, the Counterpoint operation proved ‘margin dilutive’.

In recent years, margins in licensed wholesaling have tightened and the on-trade has contracted. These trends have been exacerbated by Covid-19.

While that the company continues to manufacture and market soft drinks – it’s Ireland’s second-largest soft drinks manufacturer by volume – it now does so via wholesale partnerships with other wholesalers to protect and grow its share of this channel.

Britvic Ireland has previously stressed that it’s fully committed to the Irish market through the 400 staff still employed here through all channels. It’s bottling agreement with PepsiCo, for example, remains in place.

Over the same six-month period the previous year revenues at Britvic Ireland plc fell 12.5% to €88.5 million compared to €101 million in the 28 weeks to April the 14th 2019 according to Britvic’s last set of Interim Results.

That fall in revenue in H1 2020 was ascribed to “a significant decline in sales through the Counterpoint licensed wholesale business”.

At constant exchange rates,  revenues were down 6.3% to £617 million at the parent company in the UK, down from £699 million in the same six-month period to the 31st of March 2020.

 

 

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