Tonic maker Fever-Tree said ‘dramatic’ increases in commodity prices had led to ‘significant uncertainty’
(Picture: Fever-Tree)The cost of a night out — or even a night in — is set to rise as inflation hits the drinks industry.
Drinks manufacturer and distributor C&C Group, whose brands include Bulmers and Magners cider and Scottish lager Tennent’s, today warned it would have to increase prices to combat rising inflation on raw materials.
C&C has introduced an €18 million (£15.1 million) cost-cutting drive and is focused on liquidity management and net debt reduction, it said, but will still have to raise prices. The company was already facing a hit from pandemic shutdowns in the hospitality industry.
In a separate update, high-end mixers manufacturer Fever-Tree said it faced “significant uncertainty” over costs after a “dramatic” increase in commodity prices since the start of the war in Ukraine.
It is “employing a range of mitigating actions” to combat inflation but cut its earnings guidance in response to rising costs.
Richard Hunter at Interactive Investor said: “The current cost pressures have resulted in a reduction of 4.1% to gross margins, while the number one position in the UK of almost 40% by value share does pose questions on whether the level of growth can be maintained.”
Fever-Tree has already had to hike prices, making a posh gin and tonic more expensive.
The warning on costs came as Fever-Tree reported 23% growth in revenue to £311.1 million last year. In the UK alone, revenue hit £118.3 million.
Shares rose 26p, or 1.6%, to 1653p.
