Refresco (RFRG) has warned that volumes will be below full-year expectations as poor summer weather and challenges in the private label business affected the European soft drinks bottler.

Second quarter revenues increased 1.9% to €558.7m (£480.6m) in the second quarter but a poor first quarter meant overall sales for the half were flat at €1bn (£860m).

Volumes in the three months to the end of June also rose 1.9% to 1.7bn litres but were held back by a 2.8% decline in private label as the decision to jettison low margin, large volume contracts, mainly in water and carbonated soft drinks, continued to act as a drag.

Co-packing volumes increased 18.8%, mostly driven by the recent acquisition of Dutch beverage manufacturer DIS, and now make up for 25% of total volumes.

First-half volumes were down 0.7% to 3bn litres after a slump in the first three months of the year.

Adjusted EBITDA increased to €68.3m, up from €67.6m in the second quarter of 2015.

“The unfavourable weather conditions throughout Europe and continued pressure on the private label market have created a challenging environment for Refresco to grow volumes while keeping margins at a sustainable level,” CEO Hans Roelofs said.

“Looking ahead, the third quarter had a soft start due to the poor summer weather and continued challenging market conditions for private label affecting our volumes in July. Therefore, we expect volumes this year to be below our medium term guidance.”

He added that the $129m July acquisition of US bottler Whitlock Packaging is on track to complete in September. The deal is the first step beyond Europe, creating a second platform for further growth in North America.

Refresco bottles drinks for the likes of Innocent and Del Monte and supplies private label products for retail customers such as Tesco.

Net profits for the first half rose to €34.6m, compared with a loss of €9.9m a year ago when it was hit with charges for its flotation on the Amsterdam stock market.

Shares in Refresco has fallen almost 1% so far in today’s trading to €13.97 on the challenging outlook.