Britvic’s Fruit Shoot recall could cost £5M

"The potential financial impact of the recall is being analysed, but at this very early stage it is anticipated that there will be a limited cost estimated at between £1M and £5M to profits before tax in the current financial year,”​ said the company.

Britvic is recalling all Robinsons Fruit Shoot and Fruit Shoot Hydro packs, that feature the new design cap, due to “a packaging safety issue”.​

The firm said the recall was a precautionary measure after it had detected “a small number”​ of damaged caps.

Safety risk​

A statement on Britvic’s website warned the caps had been damaged during the manufacturing process. “This is fundamentally a quality issue but as the damaged caps may become fully or partially detached, we recognise that there could potentially be a very small safety risk,”​ it said.

The problem concerns the cap only and not the soft drink, it added.

Investigations were continuing to identify the cause of the problem and find a solution, said Britvic.

Fruit Shoot My-5 is not being recalled. No other Robinsons products are affected.

City analyst with Panmure Gordon Damian McNeela noted that the recall came after a wet June, which was likely to have dampened sales. “Soft drink volume data for June is not yet available but April saw 11% volume declines, May’s volumes gained 4% but were driven by heavy promotional activity. ​

Promotional activity​

“We expect June’s volumes to be down by high single digits, and believe that, even if the weather improves over the remaining summer months, promotional activity will remain high.”​

Last month was the wettest June on record. Also, the period from April 1 to June 30 was the wettest second quarter on record.

Panmure has cut its forecast of profit before tax and amortisation for the financial year 2012 by £6M to £105.1M. That included £3M for the product recall and £3M for impact of poor weather.

McNeela concluded: “Given the challenging UK and Irish consumer markets, we maintain our hold recommendation​ [on Britvic’s shares] and lower our price target to 350p.”​