C&C Group announces drop in core cider sales

Core cider sales at Magners owner C&C Group have fallen in the six months to the end of August.

Dublin-based C&C said net revenue declined 2% to £214.3m (€263.4m) in the half-year, with operating profits down 2.7% to £53.3m (€65.6m). However, it said a better performance by the Scottish Tennent’s beer operation helped limit losses. The group also saw strong international growth, and has confirmed plans to ramp up its global operations with a deal to acquire the Vermont Hard Cider Company in the US.

C&C Group CEO Stephen Glancey said that, while cider brands Magners in the UK and Bulmers in Ireland “both saw volume declines in the period, other parts of the business performed well”.

A “challenging trading environment” in both markets was blamed for the decline.

Tennent’s, acquired by C&C from AB InBev in 2009, continued to outperform the Scottish beer market. The brand has also launched in new markets including Italy, Russia and Ukraine.

Glancey added that “innovation remained a key priority” and over the period the company had launched Magners Berry, Gaymers flavours, Tennent’s Original Export and Caledonia Smooth.

The £190m ($305m) deal to acquire Vermont Hard Cider Company, subject to US anti-trust clearance, had the potential to transform C&C’s international cider business and accelerate growth, he said.

“In the short term, we are delighted to confirm a resilient performance in tough markets at the same time as laying some exciting foundations for accelerated international growth,” Glancey added.

Last week, The Grocer revealed that overall volume sales of cider brands - which were growing 18% two years ago - had risen just 0.2% year-on-year [Kantar Worldpanel 52 w/e 8 July 2012].