Magners slide puts C&C growth on ice

09 May, 2008

Magners owner C&C Group has vowed to fight back in the UK after a slump in cider sales sent operating profits down by more than a third.

Magners owner C&C Group has vowed to fight back in the UK after a slump in cider sales sent operating profits down by more than a third, it announced on Friday.

C&C said sales fell eight per cent to €679m and operating profit plummeted by 37 per cent to €125m for the year ended February 29th.

It blamed the drop on a poor performance from key cider brand Magners, which caused group cider volumes to drop by 11 per cent – despite a 41 per cent rise in marketing spend.

Poor summer weather in 2007, particularly compared to the heatwaves of 2006, coupled with previous warnings from C&C, meant a decline had been anticipated.

Analyst firm Citigroup said in a note on Friday that C&C’s results were “better than expected”.

C&C chief executive Maurice Pratt said the firm aimed to “stabilise” its performance over the next 12 months. He predicted the group would return to growth with the help of a business improvement plan, a warmer summer and high marketing spend.

It has already cut 150 jobs as part of a cost-savings scheme that aims to recoup £10m this year.

Magners is expected to move away from the “season-based advertising” that has made it too reliable on the weather, OLN understands. It is also understood that C&C management recognises a need to be more “consumer responsive” in the UK.

New Magners Light on draught has trialled well in the O’Neills pub chain, it is believed, and C&C will launch Magners on draught later this month.




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Looking back to look forward

Wine is a liquid time capsule. Drinking older vintages not only recalls the weather conditions and winemaking styles of the past, it encourages us to reflect upon our own histories. Such reminiscence often inclines towards romanticised nostalgia. Especially after the second bottle. But looking back is a great way of learning about the future.

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