Blog: Chris MercerMolson Coors counts cost of Home Draught recall

Chris Mercer | 4 August 2010

Molson Coors' costs increased more quickly than they should have done in the UK in the second quarter of 2010 after the Carling brewer was forced to recall some of its newly launched Home Draught kegs.

Molson Coors pulled several batches of its Home Draught system from sale after receiving a consumer complaint.

How the alarm bells must have initially rung at the brewer's Burton-on-Trent headquarters. When launching a new product, the prospect of a recall must surely be listed under the "worst case scenario" heading.

The group said yesterday (3 August) that the recall contributed to 25% of an increase in sales costs per hectolitre of owned brands in the three months to the end of June. Cost of sales in local currency rose by 8%, excluding one-off pension-related payments, of which 2% was due to the recall.

No disaster, then, but it's not as if the brewer needs any extra problems in what is a particularly tough UK beer market.

Not that the recall held back own-brand volume sales, which returned to growth and crept up by 0.7% in the second quarter.


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