Tonic maker Fevertree Drinks has today reported a 15% fall in its first-half pretax profit, pressured by sluggish UK sales to bars and restaurants and lower US margins, partly due to profit-sharing with partner Molson Coors.
A majority of Fevertree products sold in the US are currently produced in Britain, after the beverage maker wound down a major US bottling arrangement ahead of its partnership with Molson Coors earlier this year.
"While this has exposed the partnership P&L to a tariff impact, we are jointly working hard to mitigate this impact ahead of the prospective onshoring of US production in the medium term," FeverTree said in a statement.
In July, Fevertree said it would equally split costs of the 10% US tariffs on UK imports with brewer Molson Coors, as part of a partnership that began in January.
Improvements in its global supply chain, procurement processes alongside the prospective onshoring of US production by Molson Coors over the medium term would allow for margin recovery over time, the company said.
Fevertree reported a first-half pretax profit of £11.2m compared with £13.2m a year earlier.
Still, the company's total adjusted sales inched 2% higher to £172.2m, on a constant-currency basis, supported by stronger sales of ginger beers and premium soft drinks.
