TENNENT’S maker C&C Group is preparing to launch its flagship lager into overseas markets including India, while freezing prices at home and introducing a beer aged in whisky casks.
The Dublin-based company – which makes ciders including Blackthorn, Gaymers and Magners – is freezing the price paid for Tennent’s by small pubs, which make up 75 per cent of its market, for a third year.
C&C is also preparing to launch a Tennent’s “whisky beer”, which will be aged in Scotch barrels.
Chief executive Stephen Glancey told The Scotsman that the latest beer was aimed at overseas markets where whisky is already popular and would be launched over the summer.
Edinburgh-based Innis & Gunn already brews its oak-aged beers at Tennent’s massive Wellpark brewery in Glasgow. Innis & Gunn developed its beer as a way of flavouring the barrels used by distiller William Grant for its ale cask reserve whisky.
Glancey said: “We’re not trying to compete with Innis & Gunn because it has done a fantastic job and we will be targeting different markets.
“Having our beer on sale in Russia and other markets where whisky is popular might even help Innis & Gunn.”
C&C already sells a Tennent’s stout in Russia and has hailed the success of its lager in markets such as Canada, Italy and some parts of the United States.
The company is now looking to expand its sales of Tennent’s in Asia and is eyeing entry to the Indian market. Glancey said that he wasn’t currently looking at any other takeover targets in Scotland, having bought a 50 per cent stake in drinks distributor Wallaces of Ayr in March.
He expects to buy the remaining shares within the next two or three years.
His comments came as C&C posted a 2.4 per cent rise in underlying operating profits for the year to 28 February to €113.9 million (£97m).
Operating profits at Tennent’s UK operations surged by 34.7 per cent to €30.3m, boosted by a 12.7 per cent rise in the price at which it sells the lager to supermarkets after renegotiating older contracts, which C&C inherited when it bought Tennent’s from Anheuser-Busch InBev in 2009 for £180m.
Group revenues fell by 0.8 per cent to €476.9m after cider sales were hit by wet weather in the UK and failed to receive a boost from either the Euro 2012 football championships or the
Olympic Games in London.
Glancey said: “Magners is facing increased competition in the UK, with the launch of Carlsberg’s ‘Somersby Cider’ and Coors’ ‘Carling British Cider’.
“But all the entrants are at the premium end of the market, so we’re continuing to see premiumisation. We can invest for the long-term more than our competitors can do, even if some of them are larger than us.”
Phil Carroll, an analyst at Shore Capital, said: “We believe the results highlight the resilience of the C&C business model but note the UK is becoming an ever increasingly competitive cider market. The UK saw the cider market decline for the first time in a decade mainly as a result of the poor weather.”