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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