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UK: How a faulty leak-proof cap cost Britvic £25m

Two months ago, Britvic launched a new “spill proof Magicap” for its popular Robinsons Fruit Shoot and Fruit Shoot Hydro drinks, which it believed would solve every parent’s worst nightmare: finding their child’s school bag covered in juice after their drinks bottle was accidentally tipped upside down.

The new cap was designed to be entirely leak-proof so the juice would only come out of the bottle if the cap was sucked.

But in early July, the drinks giant was forced into an embarrassing recall of millions of bottles of Fruit Shoot and Fruit Shoot Hydro in the UK, France, Netherlands and Belgium after it received several complaints about the new design.

Parents had discovered that the cap would detach if it was chewed and tugged by their child. In one case, a child was found with a loose cap in their mouth.

The cost of the recall has turned into a £15m-£25m hit to pre-tax profits spread over the current financial year and 2013. The company has also warned of an “additional negative impact” on working capital.

Paul Moody, chief executive of Britvic, said he had originally hoped the problem could be resolved through a few adjustments but it soon became clear that the new design would have to be scrapped and replaced with a tried and tested sports cap.

This means the product won’t be back on the shelves for several weeks and Britvic anticipates it won’t be back to full production levels for six months.

The group doesn’t break down volumes and sales of its individual brands but analysts estimate Robinsons Fruit Shoot, the leader in the £300m-£400m children’s juice market, is worth £96m to the company.

Source: The Telegraph

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