Global Brands has blamed £2m in EPR costs for a 93% fall in its pre-tax profits, as the Hooch and VK owner struggled to pass on the full costs of the government’s new packaging policy.
After sliding double-digits in 2024, turnover at Global Brands bounced back up 7.7% to £71.5m in the year ended 30 September 2025. Meanwhile, gross profits swelled 10.4% to £22.4m.
However, operating profits slumped 66% to £584k, while pre-tax profits dropped from £2.5m to just £184k.
The Derbyshire-based business said the introduction of EPR charges in April 2025 had “a significant impact on profitability during the year”.
“Industry guidance on EPR remained unclear throughout the implementation period, with further revisions introduced in June 2025,” company director Steve Perez wrote in the accounts. “While selective price increases were implemented in April 2025 based on estimated costs, the full impact of these fees was not fully recoverable from customers until late summer.”
EPR costs for the period totalled “approximately £2m” and represented “the primary driver of the reduction in profitability for the year”, Perez added.
The business was also hit by ongoing pressures on the hospitality sector. Increases in rent, energy costs and the national minimum wage continued to “place significant strain on an industry that remains under pressure in the current economic environment”, said Perez.
Additionally, Global Brands had increased spending on “recruitment, training and upskilling” as it looked to strengthen its commercial teams and “support its growing brand portfolio”.
This had made the year to last September “one of transition” with the benefits of increased investment set “to be realised in the coming financial year”, predicted Perez.
International expansion remained a “key strategic priority” for Global Brands, with overseas revenues climbing by £300k to £5.7m. This was below the £6.2m in international sales delivered by Global Brands in 2023, however. The business now operates in over 75 countries, with key markets including the US, Italy and the UAE.
Looking ahead, the planned introduction of DRS in the UK in 2027 presented “further cost and operational complexity”, Perez warned.
The “current divergence” between the proposed Welsh scheme and those in the rest of the UK was a further source of uncertainty, he added.
“These results reflect a year of continued investment in the long-term growth of the business, both in the UK and internationally, particularly through our people, infrastructure and the continued development of our US operation,” Perez told The Grocer.
“As a diversified group, our results have also been impacted by increased operating costs across our hospitality businesses, including higher business rates, National Insurance contributions and salary increases, alongside the introduction of extended producer responsibility fees across the drinks sector. These are significant additional costs that many businesses across our industry are now managing.
“Despite these headwinds, we remain confident in our long-term strategy. We have continued to invest in strengthening our brands, our capabilities and our people, ensuring the business is well positioned for future growth across all our markets.”
In April, Global Brands struck a deal to acquire the assets and IP of low-calorie, gluten-free beer and cider brand Skinny Brands.
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