AG Barr, the company behind Scottish soft drink favourite Irn-Bru, said it is substantially reducing the amount of sugar in its products, ahead of a British government tax on sugar-sweetened fizzy drinks. 

The company, which also reported a 7% rise in annual profit today, said that such reformulation would help to minimise the financial impact of the levy.

The new UK tax was proposed earlier this month and will be based on a drink's sugar content. 

The tax would add to the challenges facing AG Barr and its rivals such as Britvic and Coca-Cola Enterprises, which are already grappling with increasingly calorie-conscious consumers.

"To ensure success in the UK market we are focusing our marketing efforts on our "lower" and "no" sugar products and are substantially reducing the sugar content of our portfolio to reflect consumers' changing preferences," AG Barr said in a statement. 

Food and drink makers have an array of ingredients they can use in place of sugar, including sweeteners like aspartame and stevia, and they can also reduce portion sizes to control calorie counts. 

AG Barr has already reduced the average calorie content of its portfolio of products by 8.8% in four years, it said.

It added that it expects to accelerate the pace of change over the next year by reducing its exposure to high-sugar products. 

Even though AG Barr gets all its revenue from the UK, it said its brand strength, product reformulation and innovation would help it to minimise the impact of the proposed tax. 

Aside from Irn-Bru, AG Barr sells Tizer, Rubicon and Strathmore water. 

AG Barr said its statutory pre-tax profit rose to £41.3m for the year ended January 30 from £38.6m a year earlier. 

The company had said in late January that a "soundly executed Christmas" had helped it boost results in a challenging and highly competitive UK market.