CANADA: Big Rock reports fall in Q2 income
Big Rock Brewery has blamed an increasingly competitive beer market for falls in its second quarter net income and sales revenues.
The Canadian-based craft brewer said that net sales revenues reached C$10.4m (US$9.7m) compared to C$10.6m in the same period last year. This resulted in a fall in net income to C$1.5m compared to C$1.8m in the second quarter last year.
"The quarter started well with April 2008 sales C$317,146 higher than April 2007, but cool, wet weather experienced throughout much of May and June impacted Alberta 2008 second quarter sales, where 14% growth in April declined to only 2% for the quarter as a whole," a statement said.
Cost of sales crept up 2%, compared to the same quarter last year, which the firm attributed to higher labour and raw material costs. Overall selling expenses increased 11% in the quarter.
"Big Rock operates in an environment that is both highly competitive and highly government regulated. Due to the ongoing shifting effects of competition, the ability to predict future sales and profitablity with any degree of certainty is limited," said Big Rock.
It continued: "There is a continuing entry of premium and super premium beers from other craft breweries, and the larger national and multi-national brewers with products that compete directly with craft beers. A large number of imports are also being sold in the same markets where Big Rock competes for business. With the large choice of brands now available, and the advertising initiatives of the major breweries, it is likely that price promotions due to competitive pressures will continue."
Sectors: Beer & cider
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