IRELAND: C&C Group Q3 cider sales drop

C&C Group has reported another fall in cider sales for its fiscal third quarter, but the Magners owner remains hopeful of stemming a volume rot after a strong Christmas period in the UK.

Net sales for the three months to the end of November fell by 9% against the same period last year, reflecting a 13% drop in cider sales across the UK and Ireland, C&C Group said in a trading update today (15 January).

The Ireland-based firm's share price slipped by 3% on the London Stock Exchange following the announcement, despite the firm reiterating that operating profits would hit the high end of its guidance range of EUR77m (US$111m) to EUR82m.

Operating profits will receive a EUR7m boost from the acquisition of Tennent's lager and brewing operations from A-B InBev. Tennent's' contribution is not included in today's sales update.

"Business conditions in the Group's core cider markets remain challenging," said the C&C Group, which sells Bulmers in Ireland and Magners in the UK.

Cider volume sales slipped 9% during the third quarter, reflecting a 15% drop in the UK, 7% in Ireland and an 8% rise in exports to other countries. That means total cider volume sales were down 3% for the first nine months of the group's fiscal year.

But a boost over Christmas, including a 3% rise in December, has given the firm hope.

"C&C expects to report a modest year-on-year decline in cider volumes for FY2010, this compares with a volume decline of over 14% in the 2008/09 financial year," it said. Nine-month group sales were down 7%.

Spirits and liqueurs volumes, including Tullamore Dew Irish whiskey, rose 23% in volume in December as they began to lap the problems with destocking a year earlier.

C&C Group added that it still expects to complete its acquisition of Gaymer Cider Co from Constellation Europe by the end of January.

For the full announcement, click here.