AG Barr backs Britvic merger as profit rises

 
Kasmira Jefford
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AG BARR, the Scottish drinks company behind Irn-Bru and Orangina, posted a jump in sales and profits yesterday and said it was “business as usual” despite the overhanging uncertainty created by an investigation by the Competition Commission (CC) into its proposed £1.4bn merger with Britvic.

The planned tie-up between the two soft drinks giants was thrown into disarray last month after the Office of Fair Trading referred the merger to the CC for a six month investigation.

Chief executive Roger White said: “The boards of both AG Barr and Britvic continue to believe that there are no grounds for a significant lessening of competition and they will be able to demonstrate this to the Competition Commission.”

However he added that he was confident in Barr’s future and if the deal wasn’t approved “then it is an opportunity lost and no more”.

The group has so far paid around £3.2m in legal fees related to the deal.

Releasing its full-year results, Barr said pre-tax profits increased 4.3 per cent to £35m while sales rose 6.6 per cent to £237.6m, despite last year’s “extreme” wet summer weather.

Profit margins fell 160 basis points as a result of stubbornly high sugar costs and aggressive promotional activity in the UK.

The group is building a new £44m warehouse in Milton Keynes, which it said is on track to begin producing cans this summer.