East Anglia: Britvic facing �25m hit from Robins Fruit Shoot product recall
THE maker of Robinsons Fruit Shoot today warned that the profit impact of recalling packs with a new cap design is set to rise to up to �25million.
And Essex-based Britvic added that its run of poor trading had continued in recent weeks with both weak consumer sentiment and the wet weather hitting sales.
The company, which employs a total of 3,500 and has factories at sites including Widford, near Chelmsford, and Norwich, said results for its current financial year would be at the bottom end of City expectations, even before the impact of the recall.
Britvic recalled all bottles of children’s drink Robinson’s Fruit Shoot and spin-off Fruit Shoot Hydro featuring a new design of cap earlier this month as a precautionary measure.
Today the company admitted it had failed to resolve the problem speedily and said it would take six weeks to resume production with a new type of cap, and up to six months to fully satisfy previous levels of demand.
As a result, it predicts the episode will wipe between �15m and �25m from profits over this financial year and next, in a dramatic increase of its previous estimate of up to �5m in the year to October.
When it first announced the recall, Britvic said it had found that a small number of caps on its new design Fruit Shoot had suffered damage during the manufacturing process and, as a result, may become fully or partially detached.
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“This is fundamentally a quality issue but as the damaged caps may become fully or partially detached, we recognise that there could potentially be a very small safety risk,” it said.
“The new cap complies with all relevant EU legislation and standards (specifically as applied to small parts), however as a precautionary measure we believe a full consumer recall of ALL Fruit Shoot Regular, Fruit Shoot Low Sugar and Fruit Shoot Hydro is the responsible and appropriate course of action.”
Britvic, which also makes Tango and J20 and owns a licence to make Pepsi and 7Up, stressed that issue was restricted to the cap and that there were no issues with the drink itself.
The recall does not apply to the Fruit Shoot My-5 and all other Robinsons products are unaffected, as are other Britvic products.
Britvic’s website claims Fruit Shoot is the number one selling “children’s fast-moving consumer goods brand”, worth �96m.
Fruit Shoot Hydro, a fruit-flavoured mineral water that is free of sugar and artificial colours and flavourings aimed at children aimed seven to 11, was launched last year in a �2.5m marketing campaign.
Wayne Brown, an analyst at Canaccord Genuity, today cut his forecast for underlying earnings for the current year to �150.9mn from �182m. That would represent a 19% fall on the previous year. He said he expected the firm to reduce dividend payments to shareholders.