Reduced volumes and rising costs have seen earnings fall at Brick Brewing, which also said yesterday (9 September) that it has been hit by price promotion activity by its competitors.

The Canadian, publicly-held brewery, said that the second quarter of fiscal 2009 produced earnings before interest, income taxes, depreciation and amortisation (EBITDA) of C$454,000 (US$424,000), compared with C$942,000 in the same period last year.

The company admitted that the reduction was the result of higher commodity and input costs and reduced volumes when compared to last year.

"Rising commodity costs continue to be a challenge and have reduced our earnings by C$372,000 in the quarter," said George Croft, president and CEO of Brick Brewing. "We must continue to streamline our operations and seek to eliminate all non-strategic costs in the organisation to offset these increased input costs," he added.

Net revenues in the second quarter decreased by 9.9% to C$8.7m, as compared to C$9.6m in the same period last year, due primarily to a decline in beer volumes. The brewer said that the rainiest summer on record in Ontario was responsible for an overall industry volume decline during this period.

However the company added that aggressive price promotion activity by "foreign-owned competitors" had also contributed to the volume decline.

In the second quarter this year, Brick Brewing incurred C$201,000 in severance costs in an effort to restructure its operations and streamline senior management. A new management team was appointed in the quarter.

"In order to seek to deliver sustainable profitable growth, Brick will focus on the following strategic pillars: build a dominant owner brand portfolio within the value and premium segments, focus investment on the biggest opportunities, win within the most profitable channels and geographic markets, build a high performance, disciplined and winning organisation and optimise our operating assets," Croft said.

"In the quarter, we began to execute on all of these important targets".