The Irn-Bru maker AG Barr is moving into the ice-cream market with a range of tropical flavour tubs and lollies under its Rubicon brand.
The group, which unveiled a 6.2 per cent rise in annual pre-tax profits to £33.6m yesterday on sales up 6.6 per cent to £237m, also warned that its margins are under pressure from sharp rises in the cost of plastics and other packaging, as well the spiralling price of sugar across Europe.
Blaming sugar tariffs designed to protect European farmers, Roger White, AG Barr's chief executive, said: "It's been going on for a couple of years.The world price of sugar has gone down, but the European price has gone up."
However, Mr White still expects to be able to protect consumers from most price rises with cost cuts at the group.
As well as the move into ice cream, the company said that it will open a new factory in Milton Keynes, employing around 100 people.
Mr White reckons that debts of £6.7m will be eroded without too much effort on the company's behalf, as the strength of the balance sheet comes through.