Pepsi-maker Britvic was undermined by a “disappointing” set of results in France, its chief executive said, as the company fell behind expectations on revenue and pre-tax profit fell.
Operating profit in France dropped 1.7% over the year, while a a miserable summer ate into the firm’s sales. Profit before tax fell 24% to £110.3 million.
“Ireland was a bit more challenged, and we’ve had a disappointing performance in France, where revenue declined,” chief executive Simon Litherland told the PA news agency.
“The key driver of that is the difficult customer and consumer environment in France, lacking of a hot summer last year, and the introduction of a new law in France which restricts the amount of promotions and pricing regulations that you have to put behind brands.”
The law was intended to even re-balance relationships between smaller suppliers and retailers and helped push up the price of Britvic’s products.
Two weeks ago the company announced it was going to sell its French private-label juice business to Refresco.
Britvic bought the French arm nine years ago to add Teisseire, which Mr Litherland likens to Robinsons squash, to its portfolio.
But much of the rest of the business did not fit with Britvic’s strategy.
“The opportunity to dispose of that business, focus in on our brands and have a slightly smaller, but more profitable and agile business is the strategic choice that we’ve made,” Mr Litherland said.
The business has signed a £5 million deal to help its preferred supplier of recycled plastics build new manufacturing facilities in Leeds.
“Consumers are more aware than ever of the impact of end-of-life plastic on the environment … they want to see brands and companies acting responsibly,” Mr Litherland said. He added that Sir David Attenborough’s Blue Planet documentary helped highlight the issue.
The chief executive said he was confident that Pepsi would be able to make more sales over the Christmas period, traditionally dominated by its main rival Coca-Cola.
“It’s going to be a black Christmas, it’s going to be a new tradition,” he said. “The momentum is absolutely with us.”