Fever-Tree profits knocked by £2.8m packaging tax provision

Fever-Tree has seen annual profits slump 16% as it took a hit from a disputed £2.8 million packaging tax and beds in its US tie-up with Molson Coors.

The soft drinks and mixers firm reported underlying earnings of £42.4 million for 2025, down from £50.7 million in 2024 after setting aside £2.8 million in case its legal challenge against the Environment Agency fails.

Fever-Tree is taking legal action over the Extended Producer Responsibility packaging tax, which Fever-Tree argues should not apply to some glass bottles ​sold in bars and restaurants.

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% on a constant currency basis to £375.3 million.