There's nothing like an ice cold glass of gin and tonic with a wedge of lemon to enjoy those long summer days. But along with everything else, that's going to be more expensive this year due to the cost of living crisis.
Fever-Tree has announced it is raising the price of its drinks in the face of soaring glass bottle costs amid shortages in the UK. The tonic and mixer maker said it will pass “some” of its inflationary pressure onto customers through higher pricing.
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Fever-Tree told shareholders that “conditions remain challenging” in the face of continued cost inflation in the production of its drinks. It came as fresh figures from the Office for National Statistics showed a surprise rise in UK inflation to 10.4 per cent for February, driven by a 45-year-high in food and drink inflation.
Fever-Tree reported that operating profits slid in 2022 by around 45 per cent to £30.6 million due to the higher costs. It stressed that “glass costs and trans-Atlantic freight costs” particularly hit profitability.
Meanwhile, revenues increased by 11 per cent to £344.3 million over the year, despite a dip in the UK.
The drinks firm said it represented “a very positive performance” in the face of disruption to sales in bars and restaurants at the start of the year as well as pressure on consumer finances.
Tim Warrillow, co-founder and chief executive officer, said: “We have seen an encouraging start to 2023 in our key growth markets and are confident of maintaining the group’s momentum in the months ahead.
“The Fever-Tree brand, as shown by our highest-ever combined market share in the UK, and leadership position across many markets, is stronger than it has ever been and we remain committed to investing for the long-term both within our core mixer category but also through our expansion into adjacent categories such as adult soft drinks and cocktail mixers.”
Shares were 8.9 per cent higher on Wednesday morning.
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