AG Barr ‘positive’ despite Britvic jobs axe

Irn-Bru maker AG Barr has insisted that it “remains positive” over its planned £1.4 billion merger with Britvic, which today unveiled plans to cut hundreds of jobs after reporting a 50 per cent jump in profits.
Britvic: Will slash up to 400 jobs. Picture: VismediaBritvic: Will slash up to 400 jobs. Picture: Vismedia
Britvic: Will slash up to 400 jobs. Picture: Vismedia

Pepsi-bottler Britvic, which also makes J2O, Robinsons and Tango, is to close two manufacturing sites in Chelmsford and Huddersfield in the first quarter of next year under plans to merge its British and Irish business units.

The shake-up, which will also see some Fruit Shoot production switched to France, is aimed at saving £30 million a year by 2016 but will lead to between 300 and 400 job cuts at the group, which employs about 3,300 people.

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Chief executive Simon Litherland, who replaced former boss Paul Moody in February, said the “simplified organisational structure” will see an overall reduction in Britvic’s headcount of between 10 and 15 per cent.

He added: “We regret the potential loss of jobs caused by the change and are committed to supporting affected employees and we will of course be consulting with our employees prior to implementing these initiatives.”

Britvic’s tie-up with AG Barr, which the two firms agreed in November, had been expected to lead to about 500 job losses, and Investec analyst Nicola Mallard said the closures announced yesterday “would most likely have been part of the merger

rationalisation”.

If the deal goes ahead, AG Barr boss Roger White will become chief executive of the enlarged group, and a spokesman for the Cumbernauld-based firm, which also makes Rubicon and Tizer, said: “AG Barr remains positive regarding the future prospects and the compelling rationale of a combined Barr-Britvic business, delivered by a best-of-both management.”

Britvic’s restructuring was revealed as it reported a pre-tax profit of £37.5m for the six months to 14 April, up 50 per cent on the same period a year ago on a constant exchange rate basis. Revenues were largely flat at £639.2m. The interim dividend was lifted 1.9 per cent to 5.4p a share.

Its planned tie-up with AG Barr was referred to the Competition Commission in February and Britvic chairman Gerald Corbett said a final ruling is expected by the end of July.

Corbett added: “The board will then decide, in light of the Competition Commission’s decision, whether a transaction on the right terms with appropriate management and governance arrangements can be consummated in the interests of shareholders.

“In the meantime, as we approach our busiest time of year, the management team, under our new chief executive, is totally focused on executing its new strategy, continuing the momentum established in the first half and delivering on the vision of a growing, international and increasingly profitable Britvic.”

The group expects to deliver full-year profits before interest and tax towards the upper end of a £125m and £131m range.