Salem Radio Network News Friday, June 2, 2023


Tonic maker Fevertree to raise prices as glass costs soar

By Radhika Anilkumar

(Reuters) – Fevertree Drinks plans to raise prices of its tonics and mixers and step up production in the United States to cope with the soaring cost of glass bottles and glass shortages in Britain, it said on Wednesday, boosting its shares.

Energy and commodity costs have surged since Russia invaded Ukraine last year, leading companies across the globe to hike prices and look for savings, while households struggle to manage their bills.

Fevertree, which sells most of its upmarket mixers in glass bottles, warned in January its profits this year would be hit by an estimated 20 million pound ($25 million) increase in glass production costs.

The London-based company, which supplies to about 85 countries, did not say by how much it would raise prices, nor give details of its U.S. production plans.

“Markets have reacted well to news that it plans to ramp up U.S. production and to pass on costs to its customers in order to protect margins,” Mark Crouch, analyst at social investing network eToro said.

Fevertree shares were up 3.9% to 1,120 pence at 0940 GMT.

“Whilst the group continues to operate in a challenging cost environment, we are resolutely focused on delivering a wide range of initiatives across the business that will optimise operational capabilities and underpin our confidence in driving margin improvement in 2024 and beyond,” CEO Tim Warrillow said.

Fevertree, founded in 2003, said it was working with glass suppliers to mitigate costs wherever possible.

The company’s tonics retail at about 1.7 pounds to 2 pounds at supermarkets across Britain, while Coca-Cola-owned rival Schweppes sells at around 1.3 pounds.

Coca-Cola HBC AG, one of Coca-Cola’s many bottlers worldwide, said in February it would also increase prices to tackle rising costs.

Fevertree reported a 37% fall in adjusted core profit to 39.7 million pounds for the year ended Dec. 31, in line with its guidance.

($1 = 0.8155 pounds)

(Reporting by Radhika Anilkumar in Bengaluru; Editing by Sherry Jacob-Phillips and Mark Potter)


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