Fevertree Launches Legal Challenge Over Packaging Tax | CityAM

Fever-Tree Drinks has initiated a formal legal challenge against the UK Environment Agency over the application of a sustainability packaging levy to its glass bottles, the premium mixer brand confirmed on Tuesday.

The dispute centres on whether the glass used in some Fever-Tree products should be classified as non-household packaging, thereby exempting it from the Extended Producer Responsibility (EPR) levy. The company argues its packaging should be treated differently “in line with the position taken by the UK government in relation to other packaging regulations,” according to a statement released by the board.

The EPR tax, designed to make large businesses contribute to the cost of packaging disposal, places significant charges on heavier materials like glass. Fever-Tree disclosed it had not provided for certain costs related to the levy as of September 2025, and the legal challenge followed in recent weeks.

The company is currently accounting for potential financial impacts from the EPR levy despite the ongoing legal proceedings. The tax has drawn criticism from other businesses, including retail giant John Lewis and sausage maker Heck, both of whom have highlighted the associated costs.

Fever-Tree reported a 16 percent drop in pre-tax profit to £30 million this year, a figure the company partially attributed to changes resulting from its partnership with Molson Coors. The deal, which saw Molson Coors take an 8.5% stake in Fever-Tree for £71 million in January 2025, has altered the way the company reports its profits.

The drinks maker is also responding to shifting consumer preferences in the UK, with a noted trend away from spirits towards soft drinks. “Higher labour costs, duty increases and ongoing consumer caution continued to pressure discretionary spending, weighing on spirits volumes, particularly gin, and by extension the mixer category,” the firm stated. Fever-Tree is expanding its non-alcoholic range to capitalise on this shift, with CEO Tim Warrillow noting the brand is “increasingly enjoyed… as a premium soft drink.”

Even as UK revenue decreased by 2 percent to £108 million, US revenue grew by 3 percent to £132 million. The expansion into Molson Coors’ distribution network, completed in June 2025, is intended to further boost US sales.

Market analyst Mark Crouch of eToro noted that diversification beyond tonic is gaining traction, now accounting for nearly half of the group’s sales. However, he also highlighted ongoing challenges, including the UK packaging levy dispute and broader economic pressures. “The UK packaging levy dispute adds a bitter twist, while inflationary pressures, cautious consumers and the ripple effects of geopolitical tensions are all potential hangovers for Fevertree going forward,” Crouch said.

The Environment Agency has been contacted for comment but has not yet responded.