Drinks company C&C hails Tennent’s sales

THE coldest spring in 50 years has seen UK and Irish cider sales slump at Irish drinks company C&C, run by the former Scottish & Newcastle duo of Stephen Glancey and Sir Brian Stewart.

Tennent's boosted C&C while its cider brands such as Magners struggled. Picture: Contributed

C&C, whose flagship cider is Magners, but which also makes Blackthorn and Gaymers, revealed yesterday that the exceptionally cold weather helped trigger a 22 per cent fall in cider volumes in the UK in the three months to end-May. Magners volumes were down 20 per cent.

In Ireland the company’s cider volumes slid 13 per cent. C&C said in a statement: “Trading conditions in the group’s core Irish and UK markets were difficult in Q1 and are expected to remain so for the remainder of the year.

“Volumes were generally weaker in March and April driven by unseasonably cold weather with a relative improvement in May.”

In the quarter, net revenues in the UK cider division fell 24 per cent, and revenues in the Irish business were off 13 per cent.

C&C said despite the “challenging” trading in the UK cider category it was continuing to invest in its core Bulmers brand in Ireland (Heineken owns UK Bulmers) as well as Magners, with the launch of the new “Now is a Good Time” marketing campaign.

C&C, which bought the leading Scottish lager Tennent’s in 2009, has also hit the acquisition track in the latest financial year. It said that as a result 2014 would be a consolidation period “given the scale, scope and pace of acquisition activity in financial year 2013”.

The group, whose shares are traded on the Irish stock exchange, snapped up the biggest cider brand in the United States last October when it paid $305m (£190m) for the Vermont Hard Cider Company. Its star brand is the Woodchuck label. The following month C&C bought Gleeson Group, one of Ireland’s biggest drinks distributors, for €58 million (£46.8m), including debt. Last March the company acquired a 50 per cent stake in Scottish drinks distributor Wallaces Express of Ayr.

Glancey, group chief executive, said Tennent’s had continued to do well “and provides a degree of balance to a competitive UK cider market”. Total Tennent’s volumes in Scotland rose 7 per cent in the latest period, but saw a 12 per cent decline UK-wide.

Glancey said: “We remain confident in the attractive prospects of international cider. While we have not meaningfully participated in the category growth in the US in this quarter, our fundamental assumptions about the attractiveness of the cider category in the US and the broader opportunity for our portfolio in international markets remains unchanged.”

C&C said it expected profit in the current year of between €125m and €132m – an increase on the previous year of between 10 and 16 per cent. It also flagged up that dividends were likely to increase on the previous year.

The company delivered 77 per cent cider volume growth in international markets, helped by the acquisition of the Vermont Hard Cider Company. Woodchuck’s volumes rose 3 per cent in the quarter.