UPDATED IRELAND: C&C Group denies spirits business sale

Magners cider owner C&C Group has said that it is not selling its spirits business, following a report by just-drinks this afternoon (2 March).

A spokesperson for C&C told just-drinks this afternoon that talk of a sale was "incorrect". He said that "the spirits business is categorically not for sale".

His comments come after just-drinks today reported a source close to the company as saying that the spirits business, which includes the Tullamore Dew whiskey brand, was to be sold.

The business also includes Italian liqueur Frangelico and Carolans, the second biggest Irish cream liqueur brand behind Diageo's Baileys.

The source's comments came ahead of what is expected to be a reorganisation of the firm by C&C's new management team, which was appointed last autumn and is led by ex-Scottish & Newcastle CEO John Dunsmore.

The team, which has been tasked with revitalising the firm's share price after significant decline in the last 12 months, is set to announce a plan of action in a full-year trading update tomorrow (3 March).  

The group has already said that it plans to cut 18% of its workforce across Ireland, with 121 jobs set to be lost at the Bulmers cider plant in Clonmel.

C&C's spirits and liqueurs business accounts for just under 20% of group profit, with cider, including the Magners brand, bringing in the rest.

Analysts told just-drinks today that a spirits business sale would make "strategic sense" for C&C, but that the group may be unwilling to immediately divest anything that is still growing sales.

Unlike cider, which has reported a near-continuous sales decline for the last two years, the spirits and liqueurs business increased sales by more than 10% to EUR87.5m for the year ended February 2008.

The business accounted for around 13% of group net sales for the year, which totalled EUR679m. Operating profit in spirits fell to EUR15.8m for the 12 months, down from 17.7m a year earlier, however.

Tullamore Dew whiskey has distribution deals with Campari-owned Skyy in the US and with vodka firm Russian Standard in Russia. C&C spirits and liqueurs are also distributed by the Maxxium Worldwide venture in the UK, Germany, Bulgaria and New Zealand.