New recycling levy and US transition take the fizz out of Fevertree as profits plummet 16%
Fevertree saw annual profits plunge 16 per cent, reflecting margin pressure from its new US partnership and a hit from a disputed recycling tax.
The soft drinks maker said underlying earnings fell from £50.7million to £42.4million in 2025, after setting aside £2.8million for the UK's new packaging tax.
Fevertree is disputing the Extended Producer Responsibility (EPR) scheme, which requires packaging producers to cover the full cost of managing waste.
It has launched a legal challenge against the Environmental Agency, arguing that it should not apply to some glass bottles sold in bars and restaurants.
'This is in line with the position taken by the UK government in relation to other packaging regulations,' it said.
'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.'
Fevertree is disputing the government's new packaging tax, setting aside £2.8m
Share this article
Fevertree also said margins had come under pressure from costs related to its partnership with Molson Coors.
It booked £5.2million in one-off costs 'which related to the transition to the Molson Coors partnership and included final costs in relation to the winding down of the historic primary US bottling relationship'.
Molson Coors bought an 8.5 per cent stake in Fevertree in January 2025, giving it exclusive rights to market its drinks in the US.
The drinks maker also said it had seen an impact of US tariffs, as it makes the majority of its US products in the UK.
'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.'
Fevertree shares fell 4.5 per cent before rebounding to trade up 5.2 per cent at 793p by 10.45am.
Mark Crouch, market analyst for eToro, said: 'At first glance, Fevertree's update might look like a step backward, but beneath the surface lies a business in transition rather than outright decline.
'A 16 per cent drop in EBITDA will raise eyebrows, yet much of that weakness reflects deliberate investment, most notably the early-stage costs of its tie-up with Molson Coors in the US.
'Still, challenges linger. The UK packaging levy dispute adds a bitter twist, while inflationary pressures, cautious consumers and the ripple effects of geopolitical tensions are all potential hangovers for Fever-Tree going forward.'
DIY INVESTING PLATFORMS
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
Compare the best investing account for you
