Premium mixer brand Fever-Tree has reported a 16 per cent decline in its annual profits, attributing the downturn to a contested £2.8 million packaging tax and ongoing integration costs from its US partnership with Molson Coors.
The company’s underlying earnings for 2025 fell to £42.4 million, a significant drop from £50.7 million in 2024.
This figure includes a £2.8 million provision, earmarked in anticipation of a potential loss in its legal battle against the Environment Agency.
Fever-Tree is challenging the Extended Producer Responsibility packaging tax, contending that certain glass bottles distributed to bars and restaurants should be exempt from the levy.
The group said: “This is in line with the position taken by the UK government in relation to other packaging regulations.
“As previously disclosed, the Environment Agency has challenged this view, and in recent weeks we have launched a formal legal challenge.
“As a result of this development, and given there is uncertainty in the outcome, from an accounting perspective the board now considers it prudent to provide for the potential incremental EPR liability.”
The firm said earnings were also weighed on by profit margin pressure as the new partnership with Molson Coors gets under way, due to “short-term transition-related cost inefficiencies alongside the impact of sharing US profits”.
American beer maker Molson Coors bought a stake in the company last year, giving it exclusive rights to market its drinks in the US.
Fever-Tree said it had also seen a tariff impact as it was making the majority of US products in the UK after winding down a local US bottling contract ahead of the Molson Coors tie-up.
“We are working to mitigate this impact ahead of the prospective onshoring of US production in the medium term, which alongside Molson Coors’ operational capabilities and economies of scale will unlock significant incremental US profitability,” the firm said.
Results showed pre-tax profits fell to £29.9 million from £35.5 million in 2024 as underlying revenues rose 3 per cent on a constant currency basis to £375.3 million.
