IT is not unusual to hear a business warn of the effects of government regulation. But AG Barr seems to be spending as much time adapting to red tape these days as it does making the fizzy orange stuff which made it famous.
The Scottish firm spent much of the last couple of years preparing itself for the Soft Drinks Industry Levy, or the sugar tax to you and me, to the extent that it took the bold step of changing the secret formula of Irn-Bru.
Now it is warning investors there is even more regulation to come.
AG Barr’s comments to the market appeared to catch investors off guard. Shares in the company dropped nearly five per cent despite an otherwise encouraging update, with AG Barr declaring that it expects to beat the amount of profits it made in its previous financial year.
However, the share price fall was a rare dip in what has otherwise been a story of upward progression over the last year. From closing at 639p on January 25 last year, shares closed at 762p last night, having steadily risen despite challenges such as the sugar tax and the Beast from the East. Judging by analysts’ comments, AG Barr has impressed the market with its performance in tough conditions.
But there are challenges to come. Not only are governments on both sides of the Border looking at regulations to cut plastic use and encourage more recycling, consumer tastes are ever-changing. There is also the matter of Brexit, with AG Barr itself acknowledging that there is still no sign of the current political and economic uncertainty coming to an end.
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