Irn-Bru maker says HGV 'challenges' have affected deliveries to customers

Irn-Bru maker AG Barr has revealed that HGV issues have been affecting deliveries to customers as well as the supply of raw materials.

It was the latest company to disclose the impact of the shortage of lorry drivers, a problem which is also now causing panic-buying at petrol pumps.

The Scotland-based company also said it was keeping a close eye on wider labour market shortages as well as how the government responds to latest developments in the pandemic.

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It revealed the details as it reported strong sales and profit growth in the first half of the year but warned on growing costs.

AG Barr said: “In recent weeks we have seen increased challenges across the UK road haulage fleet, associated in part with the COVID-19 pandemic, impacting customer deliveries and inbound materials.

“In addition, the risks associated with the wider labour pool and the current COVID-19 pandemic response are areas we continue to monitor closely.”

Chief executive Roger White told the PA news agency: “There is a tightness with drivers and we have had particular disruption too with materials, particularly aluminium cans.

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“Inflation is all around us at the moment – materials, wages and supply among other things – so we have to be careful how we manage this.”

The company said sales for the 27 weeks to 1 August rose 19.5% compared with the same period last year to £135.3m while underlying profits climbed 42.8% to £23.7m.

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It said its soft drinks, including the Irn-Bru and Rubicon brands, had benefited from a recovery in “on the go” consumption even as at-home sales remained strong as they had done through the pandemic.

Meanwhile the reopening of the hospitality venues has boosted sales of its pre-mixed cocktail brand Funkin.

But the company said profits in the second half of the year would be squeezed as costs rise while one-off benefits such as bars restocking would not be repeated.

Last week, AG Barr issued a statement in response to a widespread shortage of carbon dioxide – which is used in fizzy drinks – saying it was “currently producing to normal schedules” but could be affected if the situation worsens across Europe.

Supply chain issues have been taking their toll on the availability of products across the economy from supermarket shelves to Nando’s restaurants.

Tesco has warned the government that the issue could lead to Christmas panic-buying.

The government has responded by announcing thousands of temporary visas for foreign lorry drivers but the representatives of the haulage industry think the measures do not go far enough.

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