Irn-Bru will pay sugar tax on new energy drink

But chief executive Roger White said the firm will pay the tax on the sugar version of its new energy drink, which will be on sale around Scotland from July.

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The levy, which came into effect in April last year, applies a tax on soft drinks producers and importers at a rate 24p per litre if the drink contains eight grams of sugar per 100 millilitres. A lower rate of 18p per litre is applied to drinks which contain between 5 and 8 grams of sugar per 100ml.

Speaking after AG Barr’s annual meeting in Glasgow yesterday, Mr White said: “We will be launching a with-sugar and a no-added sugar product. We want to give consumers [the] widest choice possible, and in that sub-sector of energy – [a] standard sugar product and no-sugar product. We will be very interested to see how that split of sales consumption goes.”

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Asked if the with-sugar version would be liable for the soft drinks tax, Mr White said: “It will”.

He added: “It’s a different sub-sector. Our position from an energy drink point of view is [that] people are very clear; they’ve got a choice between a no-sugar product and a full-sugar product. And energy has a functional property to it – part of it is about the functionality of the ingredients which would include the energy coming from the sugar side of it.

“From a standard Irn-Bru point of view, we have listened to what consumers have told us for decades about how they use Irn-Bru and what it is about and it’s liquid refreshment properties. A number of years ago, we began this reformulation process right across our whole portfolio to act on the consumer logic, which was [that] consumers said they loved our products, but they wanted to consume less sugar in their overall diets, and that we could help them with that.

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“Right across our whole portfolio we have reformulated to take sugar levels down, and by and large we have had a positive response to allowing people to continue to consume our products, but also to consume less sugar in their diets.”

Mr White said the new energy drink has been well received by trade customers, with plans for listings and distribution running “ahead of our expectations”.

“We have got high hopes that it will do very well,” he said.

Explaining the rationale behind the firm’s return to the energy drinks market, having previously launched Irn-Bru 32 in 2006, Mr White said it is a growing market which is playing an increasingly important part of “consumers’ repertoires”.

He added: “We want to be able to take part of that, and Irn-Bru has a role to play. It has been providing in many senses a pick-up for consumers for well over 100 years, so entering into this seems to make logical sense to us.”

Meantime, Mr White reiterated the firm’s support for a deposit return scheme as part of efforts to recycle plastic. But he emphasised that the scheme must be rolled out on a UK-wide, not Scotland-only, basis, and that the industry should play a leading roll in developing the scheme. Responding to a shareholder enquiry, Mr White said: “First and foremost, all of our packaging is recycled. It is about creating an environment to encourage consumers to do it.”

“As a company, we are supportive of [moves] to create a circular economy,” he added, noting that the scheme should be easy for consumers to understand and use, and as “practical as possible”.

On Brexit, Mr White said preparations have focused on stockpiling ingredients and materials for production, rather than on protecting exports. He said its exports, focused on markets such as Ireland and Scandinavia, have not paused because of Brexit.

All resolutions proposed at the annual meeting were passed.