UK: Beer tax, raw material costs hit Shepherd Neame profit
UK brewer Shepherd Neame has reported a 7% rise in net sales for its fiscal first half year, but warned that raw material costs and tax rises have damaged profit.
Net sales for the six months to the end of December reached GBP56.2m (US$82.4m), the company said today (24 March).
Net profit fell to GBP3.6m, down from GBP5m for the same period of 2007, said the Kent-based firm, established in 1698 and which brews Spitfire beer and imports Asahi and Kingfisher brands under licence.
Jonathan Neame, CEO of Shepherd Neame, said: "Despite a difficult economic background, we have delivered a strong sales performance."
He added: "Our retail business has been resilient, with like for like sales down 0.2% for the six months to 27 December but up 1.8% in the 13 weeks ended 28 February 2009. Our London pubs increased like for like sales by 2.9% during the six months to 27 December. Tenanted contribution was down 4.1% on a like for like basis."
UK beer sales fell by more than 5% in 2008, with a steeper decline in the second half of the year, according to the British Beer and Pub Association.
Shepherd Neame echoed the BBPA and other brewers in noting a shift from the on- to the off-trade in the UK. This has accelerated in the wake of an 18% rise in beer duty tax last year, it said.
"Our margins have been squeezed by this change in sales mix and higher raw material unit costs of production. These were 27% higher than the same period last year, but we expect these costs to abate in the middle of 2009," said the brewer.
In the group's outlook, Jonathan Neame said: "We anticipate the second half performance will follow the pattern of the first half. We will continue to experience high costs for the rest of the year but expect them to start to reduce as we enter our next financial year."
There is always a bubble inflating somewhere. Right now that somewhere appears to be the soft drinks market. Intense interest among Japanese buyers has created an opportunity for US private-equity fir...
There's a new impulse buy opportunity for retailers and an energy/nutrition fix for consumers in the form of a niche, but growing category - the shot. Annette Farr considers the category, and takes a ...
The confirmation on Monday (13 July) that Japan's two largest drinks companies - Kirin and Suntory - are in discussions on merging their operations may have caught the industry by surprise, but the re...
Asahi has denied interest in acquiring the Orangina business, following claims that it may launch a bid to rival Suntory, according to a report....
Suntory Holdings seems to have its hands full at the moment. Not only is it in merger talks with Japanese rival Kirin Holdings, but it is now close to a deal to buy the French soft drink brand Orangin...
Asahi has launched a rival offer to Suntory's bid to acquire the Orangina business from private equity groups Blackstone and Lion Capital, a report has claimed....
Tsingtao Brewery has reported solid rises in net sales and profits for the first half of 2009, despite a slowdown on the Chinese beer market....
Asahi Breweries has posted a lift in first half net profits, as a one-off gain helped temper a marked slide in operating profits for the period....
- Most Valuable Spirits Brands in 2017 - The facts
- Most Valuable Beer Brands in 2017 - The facts
- Diageo Africa president O'Keeffe on beer & spirits
- Travel Retail needs a disruptor - Comment
- What the future looks like for Australian wine
- Diageo ready to lock horns with AB InBev in Africa
- Heineken sees Tesco pull SKUs in UK
- Fever-Tree eyes bumper NPD, pack formats for 2017
- Diageo unveils Blender's Batch in the US
- Heineken mulls M&A with $1.75bn notes issue
- Central and East Europe Report Package
- Battle of the Generations - The fight for iGen, Millennial, Gen X and Baby Boomer consumers
- Global vodka insights - market forecasts, product innovation and consumer trends
- Global Scotch insights - market forecasts, product innovation and consumer trends
- Spirit Market in the Top 5 European Countries to 2021 - Market Size, Development, and Forecasts