Tennent’s Lager owner C&C stays resilient despite headwinds

C and C make Tennent's Lager
C and C make Tennent's Lager
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Tennent’s, Scotland’s best-selling lager, has turned in a strong trading performance with renewed momentum, owner C&C Group said in a trading update yesterday.

It came as Dublin-based C&C said that it shrugged off the “weather-related disruption” towards the end of its financial year to 28 February to trade and generate cash “broadly in line with management expectations”.

In a stock market statement, the company said group operating profit was expected to be about €86 million (£76.2m), with its Admiral Taverns acquisition contributing an additional €1.1m to earnings.

The company added: “In Scotland, Tennent’s grew share in the important Independent Free Trade and retail channels in the second half, outperforming the overall GB (Great Britain) beer market, which declined 2 per cent.”

By contrast, C&C said net sales revenues for its flagship lager were expected to be up more than 3 per cent for the latest financial year, compared with down 4 per cent in the previous 12 months.

“Our wholesale business in Scotland is also performing strongly, growing volumes, +2 per cent, revenues and share in 2018,” chief executive Stephen Glancey told investors. The division saw volumes fall 4 per cent in the financial year to February 2017.

On the outlook for Scotland, C&C said: “The performance of our Scottish businesses and our growing super-premium portfolio has been encouraging and both are well positioned to deliver further value growth in financial year 2009.”

The company said the introduction of minimum unit pricing of alcohol in Scotland this year “may result in some short-term market disruption, but longer term will bring ­value to the category”.

C&C said its main cider brand, Magners, also recovered as the year progressed, in the first year of its cider distribution partnership with ­brewing giant AB InBev.

Magners volumes were up 9 per cent in the second half, benefiting from the launch of Magners Dark Fruit, increased participation in major retailers’ Christmas promotions, and incremental on-trade and wholesale distribution. That followed a 6 per cent fall in the first trading half.

C&C said Magners, which has made incursions into the Scottish cider market, will post flat volumes for the full year, in line with a UK cider market that was also flat.

C&C said the trading environment in Ireland remained “highly competitive”, both within “long” alcoholic drinks and other categories.

Bulmers brand volumes fell 6 per cent, “reflecting the loss of on-trade draught distribution points”.

In its super-premium sector, organic volume growth from brands such as Menabrea and Heverlee increased 41 per cent for the full year, adding to a 60 per cent jump in 2017.

“In addition, we saw strong first year contributions from our recently acquired craft brands 5Lamps in Ireland and Orchard Pig in the UK,” C&C added.

In the United States, Magners and Wyders stabilised through the course of the latest year, while Woodchuck and the group’s other national brands lost volume and share, “reflecting an overall cider category in high single-digit decline”, C&C added in its update.