Smooth operator: despite a slump in sales, Innocent remains the market leader in Ireland with a 79% share

Smoothie company Innocent Drinks is to launch a price war in Ireland this month when it reduces prices across its range by up to 20%.

The move comes as the company comes to the end of a restructuring process which has seen two people let go from its core Irish workforce. Director Brendan Smartt said the company is facing significant challenges in the downturn. "The market has been declining. Although our market share goes up, sales have been going down," he said.

The process has resulted in the reduction of the company's marketing department in Ireland – only one trade marketing position remains, with the rest of Innocent's 14 core staff members taking on commercial roles. Innocent's Irish operation is relatively small because its products are distributed by Glanbia.

The company is now focusing on maintaining market share and increasing sales in Ireland and will start by significantly reducing prices from next week. The move is significant because Innocent is considered the premium brand in the market and has traditionally been more expensive than similar products.

"Over the next few weeks we are going to deliver lower prices to consumers. We are hoping that from next week reductions of between 10% and 20% will be passed on by retailers," said Smartt.

The company is facing increasingly intense competition with the entry of Pepsi- owned Tropicana smoothies into the market last year. Despite this, Innocent continues to command a 79% market share in Ireland.

The company was founded 10 years ago by three friends who sold their first batch of smoothies through their local café but now sell more than two million each week in 10 countries across Europe. Sales bring in about £100m (€112m) annually, generating profits of £6m (€6.7m).

The brand relies heavily on the promotion of ethical and healthy living. Marketing focuses on the purity of its ingredients and 10% of profits going toward charitable causes annually. Through the Innocent Foundation, it funds rural development projects in the third-world countries where its fruit originates.

That focus on ethical living is the reason a £30m (€33m) investment by Coca Cola announced last month attracted a flood of complaints to the company's head office, Fruit Towers, in London. The controversy is unlikely to have a lasting impact – similar complaints were raised when it signed a deal to supply McDonald's two years ago but sales were unaffected.