Mounting price pressure on the soft drinks category has hit the UK sales of drinks giants Cott Beverages and Refresco.
Cott’s UK sales fell 7.8% to £266m in the year to 2 January 2015 amid a slight fall in own-label soft drinks volumes and a larger value decline.
To cope with what Cott called the “continued challenging market environment” it said it had sought to protect its core tail and sports & energy business, develop its own brand portfolio and broaden its channel presence. It added during the year a “major retail customer” did not renew a private label soft drinks contract from February 2016, leading to a “cost reduction programme” in the UK. This year, Cott cut about 80 roles from its site in Nelson, Lancashire.
Cost efficiencies and reduced input costs helped gross margin increase to 18% from 16.9% and pre-tax profits rise 129% to £37.6m during the year.
Refresco saw a 5.1% fall in UK sales to £284m as it passed on lower input costs to customers as the market continued to decline. However, operating profits before exceptionals rose 46% to £7.5m as the cost of sales fell and it reported a headline profit of £8.7m.
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