Molson Coors expects a lively second half of the year in Canada

Molson Coors expects a lively second half of the year in Canada

Negative ForEx movements may have impacted Molson Coor’s performance in Canada but 2015 could be a game of two halves, according to the company's CEO.

In the second quarter, Canada’s pre-tax profits fell by 5.5%, due to negative foreign currency movements. "A decrease in the Canadian dollar versus the US dollar resulted in an US$11.8m negative foreign currency impact on underlying pretax income in the quarter," the company said.

Sales to retailers were also down, by 8.1% on a reported basis in the second quarter. The company said approximately half of the decline was due to the termination of the Miller brands licence agreement, earlier this year.

On a conference call following yesterday’s results announcement, CEO Mark Hunter told analysts the company has "options" in the second half.

"The encouraging thing in Canada is that our pricing performance was strong and, having now secured a pricing performance, clearly that gives us options moving into the second half of the year. We do intend to step up the level of our commercial investments behind our brand portfolio."

Stewart Glendinning, CEO of Molson Coors’ Canadian unit, said the brewer must balance share and price in the market, highlighting a specific change in the region: "One area of note is our conscious decision with Coors Light in Quebec in the second quarter to take the price up to match the 5% [abv] beers. That’s the one market in Canada where historically the 4% beers have been priced underneath the 5% - so we sought to address that."

Speaking more generally about Canada, he said: "In other parts of country, we saw some fairly aggressive pricing and trade-spend, and my team is looking at those tactics for the back half.

"There were places where higher prices translated in to lower share," he said.

Hunter noted that there are "a couple of areas we’ll look at fixing" during the second half of the year, including volume impact in Quebec following the price rise for Coors Light.