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Tonic Maker Fever-Tree Faces Sharp Cost Increases From Ukraine Crisis

Published on Mar 21 2022 2:36 PM in Drinks tagged: Fevertree / Fever Tree / Fever-Tree Drinks

Tonic Maker Fever-Tree Faces Sharp Cost Increases From Ukraine Crisis

Tonic maker Fever-Tree FEVR.L has said that dramatic rises in commodity prices following Russia's invasion of Ukraine have led to uncertainty around costs for the British company and will hurt its 2022 profit.

Prices Soaring And Logistical Snags

Sanctions against Moscow for invading its neighbour have sent prices soaring amid uncertainties over commodity supplies from both nations and added to worries of inflation. Fever-Tree and others in the industry were already facing logistical snags.

Profit

The London-listed company, which sells premium tonics and drink mixers, said that it expects core profit of £63 million to £66 million this year, lower than analysts' consensus of £71.7 million.

Fever-Tree reported a profit of £63 million for 2021 and had previously forecast 2022 profit in the range of £69 million and £72 million.

Did Not Specify Which Prices Were Hurting It

The company did not specify which price rises were hurting it and did not immediately respond to a request for details.

A Lack Of Russian And Ukrainian Commodities

Earlier in the day, commodities trader Glencore GLEN.L said that markets must adapt to a lack of Russian and Ukrainian commodities.

Russia, which has called its actions in Ukraine a "special military operation," is a key supplier of oil, natural gas, coal, aluminium and nickel, while Ukraine is a major grain producer and exporter.

Statement By Chief Executive Officer

"Whilst the tragic situation in Ukraine has resulted in significant uncertainty in relation to our input costs in the short term, the long-term global opportunity for Fever-Tree remains substantial," Chief executive officer Tim Warrillow said in a statement.

Statement By EToro Analyst

EToro analyst Mark Crouch said that Fever-Tree's troubles were "probably far from over", with rising COVID-19 cases in several countries also posing a threat to restaurant and bar sales.

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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