Europe's gin craze sees profits fizz at tonic producers Fever-Tree

Fever-Tree saw growing demand for gin across Western Europe help more than double profit at the drinks mixer firm.

The group, launched in 2005, said pre-tax profit jumped 104% to £34.3m in the year to the end of December compared to 12 months before, as sales grew in key regions such as the UK, US and Germany.

The firm, which sells tonic waters to bars and supermarkets, said continental growth "continues to be driven by the premium gin and tonic trend extending across Western Europe, as evidenced by the notable growth in certain key Western European countries in 2016 including Italy, Germany and Austria".

It added sales were driven by new deals to supply Asda supermarkets in the UK, the Target department chain in the US and Rewe grocers in Germany, while it has also expanded the distribution of tonic water with British Airways across its entire fleet.

Co-founder and chief executive Tim Warrillow said: "2016 has been another exceptional year of growth for Fever-Tree, with strong results achieved across all regions, channels and flavours.

"We have had an encouraging start to 2017 and remain confident that we are increasingly well positioned to deliver further growth across the business."

Fever-Tree, which also sells mixers such as ginger beer and Sicilian lemonade, said around 65% of its sales come outside the UK.

Warrillow wanted to produce a tonic to complement upmarket gins, and initially received backing from the family office of the estate of the James Bond creator Ian Fleming.

Shore Capital analyst Phil Carroll said following last year's strong year would be a "challenge".

But added: "We still believe Fever-Tree is capable of delivering further upgrades as we progress through the year given its excellent brand and product proposition and a lack of effective competition."