Essex boy sparks Britvic’s Fruit Shoot £25M recall

Alexander Farries' mother Shelley Farries said the lid came off her son's bottle and he started gasping while drinking. The cap was dislodged and he was unharmed.

Britvic this week increased the estimated costs relating to the product recall, which happened on July 3, from £1-5M to £15-25M, a five-fold increase.

It has also said that it will be six weeks before new supplies of the product start coming on the market due to delays in designing a new cap.

Unsteady ship ​

Analyst Investec said the change on the calculation of the costs would “provide fuel for those in the market who view Britvic as an unsteady ship”.​

Analyst Nicola Mallard said that the supply of Fruit Shoot in the UK to service historical levels of demand was now unlikely until late December. “The product recall of Fruit Shoot is now a material issue that looks set to damage both profits and reputation, given the staggered way in which the scale of the impact has filtered to market,”​ she said.

Earlier this week broker Panmure Gordon moved stock in Britvic to a 'Sell' recommendation on the back of news of weak trading combined with the product recall.

Busiest season​

Analyst Damian McNeela of Panmure Gordon told FoodManufacture.co.uk: “It's not so much about the product recall, it's about how it arose in the first place. A design modification on the cap failed in the market, which begs the question, how extensive was testing pre-launch. And why have they rolled out this NPD in their busiest season?”​

The problem also stymies Britvic's ambition to roll out Fruit Shoot in France, just as it was cracking that new market with the brand. McNeela said: “There is nothing worse than a product safety recall on a trial product in a new market.”​

He added: “Britvic needs to understand what happened and make sure that there are no further mistakes. This situation certainly creates opportunities for other people to take share from Britvic in the short term, but in the longer term the Fruit Shoot brand is still strong.”​

Meanwhile, Investec’s share recommendation was 'Buy'. “In our view, though plainly trading risk remains on the downside in the short term, the current valuation now fails to appropriately reflect the 12-month earnings horizon”.