Premium drinks player Halewood Artisanal Spirits saw annual losses grow to over £20m amid a refocus on its core UK branded portfolio and the shedding of low-margin products.

The group, which was forced to shutter its JJ Whitley vodka operations in Russia in 2002 and move production back to the UK, experienced a further downturn in a number of non-whisky categories in the year to 1 July 2023.

Vodka and other low-margin brands were affected by cost inflation, including energy, raw materials, wages and freight, and its inability to increase prices until after the Christmas period to restore margin.

As a result, the group cut headcount in non-whisky projects, scaled back international expansion, ended third party and own-label manufacturing agreements and sold or delisted low-margin brands.

This strategic refocus saw net revenues decline by £33m to £162.4m – some £25m of which was due to this refocus on core operations.

Net revenues from core brands fell by a more modest 8%, hit by short-term supply issues on vodka and downtrading from premium gins.

Sales were supported by a 31% jump in net revenues from Dead Man’s Fingers Spiced Rum, while global travel retail sales almost doubled.

However, the year ended with an operating loss of £20.9m from £16.9m in the previous year.

Company performance was also hit by a cyber-attack during its peak Christmas trading period, which disrupted its supply chain and hit sales, as well as needing to rebuild market share of its UK vodka after ending its Russian supply.

Its strategic refocus on core brands was largely completed by June 2023 and it said its portfolio of products with multiple price points in gin, vodka, rum and whiskies has mitigated the impact of downtrading.

The accounts stated: “Key objectives for the group are to grow adjusted EBITDA and to generate growth in operating income by focusing on its own artisanal spirits.”