Bottling giant Refresco was hit with an £8.1m exceptional charge last year resulting from its £935m acquisition of fellow bottling firm Cott.

Accounts for Refresco Drinks UK, formerly known as Cott Beverages, showed the business swung to a £20.8m pre-tax loss in 2018 compared with a £9.8m profit the prior year, mainly due to costs associated with its takeover.

The exceptional charges were booked in relation to a sale of Cott’s aseptic line and only UK-based manufacturing facility in Nelson, Lancashire, forced by the Competition & Markets Authority to secure approval for the deal.

The CMA had expressed concerns the merger could result in higher prices for some supermarkets and leading household brands, but agreed to give the green light following the disposals.

The transaction, completed in January 2018, saw the combination of two of the “largest drinks manufacturers in the UK”, Refresco said.

Revenues of the former Cott UK business rose 5.6% to £284.7m last year due to higher sales of its water segment and a recovery in carbonated soft drinks following 2018’s warm summer.

The company said it will “continue with its strategy to support and develop its core retail business” as well as making further investments into “capacity and flexibility”.

Meanwhile, Refresco’s existing UK arm, Refresco Beverages UK, reported a “challenging year” in 2018.

Revenues rose 8% to £362.7m as a result of higher volumes from investment in new production lines, but higher raw material cost due to market shortages resulted in a “significant decline” in gross margins to 14.4% from 15.9%.

The fall in profitability was “indicative of the challenging market”, with exchange rates also having had a negative impact.

The UK arm of the Dutch drinks giant swung to a £1.9m pre-tax loss from a £7.3m profit.