Britvic’s quarterly sales hit by closed pubs and restaurants

Tango and J20 maker Britvic has said its sales plunged by a sixth in the last quarter as the compulsory closure of hospitality venues damaged demand for its products.

The soft drinks producer saw its year-on-year earnings fall 16.3 per cent in the three months to the end of June after pubs, bars and restaurants were forced to shut their premises to customers at the end of March.

Despite the easing of lockdown restrictions, the company is still unsure how much damage the coronavirus disease will have on the business, which it stated in May was costing them between £12million and £18million each month.

Britvic’s total revenues so far this year are also down five per cent to just over £1billion. The Fruit Shoot maker said the ‘significant declines’ in sales in public places has been ‘partly offset’ by the growth in people consuming Britvic drinks at home.

Soaring demand for Robinson’s Squash helped the company to grow its market share during the quarter. In its recent half-year interim results, the firm said sales of the fruit drink in April were almost a quarter higher than in the same month in 2019.

Chief executive Simon Litherland said the quarter showed the ‘full market impact of the lockdown’ and that there was a ‘high degree of uncertainty’ about the company’s recovery from the pandemic.

But he remarked: ‘Looking further ahead, I am confident that the strong momentum we built up going into the pandemic will return, and that our long-term strategy will continue to create value for all our stakeholders.’

Pubs and restaurants were allowed to reopen to patrons on July 4, having been compelled to close on March 20 to try and prevent the spread of the Covid-19 virus.

The government has offered a package of measures to help hospitality firm weather the financial impact of the shutdown, including discounted business rates and an ‘eat out to help out’ scheme, which will be launched in August.

Under the latter plan, people eating out at a food establishment will be entitled to a half-price concession up to a maximum of £10 on food and soft drinks.

The discount will only be viable from Monday to Wednesday though and not apply to takeaway-only establishments, mobile food vans, and catering services. Consumers cannot use the discount for alcoholic drinks as well.

This could provide a considerable boost for Britvic, who are the UK’s largest soft drinks company and do not manufacture any alcoholic drinks.

Aside from J2O and Robinson’s, its brands also include Aqua Libra sparkling water, Tango, and Purdey’s. It is also licensed to bottle hugely popular international brands such as energy drink Gatorade, Pepsi Max and 7UP.

Many dining venues still remain shut; however, Pearse Carson, an analyst at multi-asset investment platform eToro, believes the partial reopening ‘can only be good news’ for Britvic’s out-of-home sales.

He added: ‘The strength of its post-Covid-19 share price recovery will be determined by when it decides to reintroduce its dividend – if it does at all, that is – but the ingredients are at least there to see a recovery in its sales.’

Britvic is not advertising on Instagram or Facebook this month in support of the #StopHateForProfit Campaign, which aims to convince social media companies to take more action against hate speech.

Major household names participating in the boycott include the long-time progressive ice-cream maker Ben & Jerry’s, sports goods firm Reebok, alcoholic drinks group Diageo, and pharmaceutical giant Pfizer.

Shares in the Hemel Hempsted-based company were down half a per cent by midday to 793.5p.