C&C Group close to bottling deal with Diageo, Heineken - report

C&C Group close to bottling deal with Diageo, Heineken - report

C&C Group has declined to comment on a report that it may sign bottling contracts with Diageo and Heineken in Ireland.

Diageo and Heineken are interested in signing a permanent deal to use some of C&C Group's spare bottling capacity at its Clonmel facility in Ireland, according to the Sunday Times newspaper last weekend. The Magners cider owner declined to comment on the speculation when contacted by just-drinks today (5 January).

Diageo also declined to comment, but it added: "On occasion and intermittently we use C&C for bottling when we are at full capacity and need them for the overflow of our orders."

C&C Group is understood to have spare bottling capacity at its Clonmel site due to a sharp drop in cider sales volumes over the last three years.

In its 2010 annual report, C&C Group stated that it had decided to re-evaluate the value of its cider production facility in Clonmel due to "significant excess capacity levels" there. This process led to a write-down charge of EUR136.5m (US$181m) for the fiscal year to the end of February 2009. There was no change in the value of the assets in the subsequent year.

The group's cider volumes have continued to struggle in Ireland. C&C's Bulmers cider sales fell by 3.4% in volume and 4.4% in value for the six months to the end of August last year. In October, the group said it would cut a further 50 jobs in its Bulmers operations in Ireland.