IRN-BRU maker AG Barr is to cut 10 per cent of its workforce after blaming the “significant weight of negative media coverage towards added sugar products” in the past six months since the UK Government announced a sugar tax.

The Cumbernauld-based firm said the move would mean 90 jobs would have to go across its commercial, supply chain and central operation as part of a £4 million major reorganisation aimed at saving £3 million a year.

A statement by chairman John Nicolson and chief executive Roger White, said the decision to raise taxes on sugary drinks in 2018 posed “a punitive and unnecessary distortion to competition in the UK market”. However, it expects at least two-thirds of its products will either be no or low sugar by the time the levy is introduced in April 2018 and so will avoid the tax.

They insisted the controversial sugar tax , proposed by former Chancellor George Osborne last March to combat child obesity, “will be very complex, expensive and difficult to implement”.

They added: “Our organisational restructure is likely to impact around 10 per cent of our total employee base, and as such around 90 job losses are possible across our commercial, supply chain and central functions. Subject to consultation, we expect that the majority of the changes will be implemented before the end of the current financial year. The likely one-off cash cost associated with this reorganisation is £4m but with an ongoing annual benefit of £3m.”

The jobs blow came as the FTSE 250 group, which also owns Rubicon, Strathmore and Funkin, recorded a 3.6 per cent drop in sales to £125.6m in the six months to June 30, down 2.8 per cent on a like-for-like basis, as customers ditched sugary fizzy drinks and juices in favour of less sweet alternatives. Pre-tax profits increased 25 per cent to £21.1m, although the boost was due to AG Barr closing its defined benefit pension scheme to new members, without which profits were flat. The company said it saw a solid first-half performance, despite a “challenging customer and consumer environment” as well as poor weather in the early summer months.

There were strong performances from parts of the business, including a 28 per cent rise in revenue for its Funkin cocktail mixer arm, driven by distribution gains in the UK and the US. Its international business has also saw revenue up by 16 per cent.

AG Barr also said it was making good progress in bringing new lower and no-sugar products to the market, ahead of the sugar tax and that its most recent additions, Irn-Bru Xtra and Rubicon Spring, both of which contain no added sugar, were “performing well at this early stage”.

The company joint statement went on: “While maintaining overall market share we have seen the impact of changing consumer preferences across our portfolio. In line with general market trends, lower and no sugar products have performed better as consumers respond to the significant weight of negative media coverage pointed towards added sugar products particularly in the last six months.”

The firm forecast the Brexit vote would cost the group between £3m and £4m in 2017 as the falling value of the pound had increased its import costs.

White said it was a “solid” performance considering the decline in demand for soft drinks. He added: “We have delivered a solid first half performance, maintaining market share, improving our operating margin with a slight improvement in our pre-exceptional profit versus the prior year.

“This is despite continued price deflation in the UK market, a challenging customer and consumer environment as well as poor weather in the important early summer months leading up to the end of the reporting period.”

“Market conditions remain volatile and somewhat unpredictable however, assuming a strong trading performance in the key festive period, we remain on track to deliver profit slightly ahead of last year.”