March 24 (Reuters) - Fevertree Drinks ( FQVTF ) posted a

16% drop in annual profit on Tuesday, reflecting the impact of a

disputed 2.8-million-pound (3.76 million) packaging levy and

margin pressure from the early stages of its U.S. partnership

with Molson Coors ( TAP/A ).

The company said it launched a formal legal challenge

against the UK Environment Agency over Extended Producer

Responsibility levy, which Fevertree argues should not apply to

certain glass formats sold in bars and restaurants.

Fevertree, which manufactures most of the products it sells

in the United States in Britain, signed a distribution and

manufacturing agreement with Molson Coors ( TAP/A ) last year to help

localise production amid rising tariffs and boost its U.S.

sales.

The company reported adjusted core profit of 42.4 million

pounds, down from 50.7 million pounds last year. Analysts'

expectations, on average, were at 44.4 million pounds, according

to a company-compiled poll.

($1 = 0.7449 pounds)