Scots face prospect of Brexit Irn Bru tax


Scottish Liberal Democrat MSP Mike Rumbles today said that Scots face the prospect of a Brexit Irn Bru tax following a post-referendum spike in the cost of ingredients in Scotland’s favourite soft drink.

While consumers have not yet felt the brunt of a weakened economy post-Brexit, manufacturers are already seeing higher ‘imported inflation’ for raw materials. 

One of the worst affected sectors is the soft drinks industry, where inflation for imported ingredients used in the manufacture of products jumped a huge 6.3% between June and July, compared to only 1% between May and June.

The increase means that producers, such as AG Barr, who make Scotland’s most popular drink, face considerably higher costs.  These costs are likely to get even worse if the UK does not secure full membership of the EU Single Market.

While the recipe for Irn Bru is a closely guarded secret, if only 50% of the ingredients were affected by the increase this could lead to a 6p increase in a standard 2 litre bottle, if passed on in full to consumers.

Commenting, Mr Rumbles said:

“When Boris and his pals were telling us about the brave new world that Brexit would bring they failed to mention that Scots could see the price of our favourite soft drink increase.

“Scots face the prospect of a Brexit Irn Bru tax if AG Barr can’t keep their costs down.

“Millions of businesses that use imported materials are already facing higher costs as a result of Brexit.  If we abandon full membership of the Single Market, as some Ministers have proposed, then things will only get worse.

“I am sure that companies like AG Barr will be crunching the numbers and doing their best to protect their customers. But they are not helped by a Tory government that is flat out refusing to tell us anything about what they think Brexit would look like or whether membership of the Single Market is under threat.”

ENDS


Notes to editors:

Imported Inflation for “Imported products used in the manufacture of soft drinks” were as follows:

Month

Price

% increase

Jan-16

105.4

NA

Feb-16

108.2

2.7

Mar-16

109

0.7

Apr-16

110.7

1.6

May-16

109.4

-1.2

Jun-16

110.5

1.0

Jul-16

117.5

6.3

The soft drinks industry employees approximately 15,000 people in the UK.  According to the British Soft Drink Association, ingredients likely to be imported (including up to 100% in some cases include):

  • Most fruit juices
  • Citric acid & other acidulants
  • Intense sweeteners
  • Preservatives
  • Colours
    Some flavourings
  • Vitamins

AG Barr have been clear that they expect to feel the brunt of Brexit, stating in their most recent Trading Update:

‘the Decision to leave the European Union has resulted in a degree of economic uncertainty… it is anticipated input costs will increase in 2017.”


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