UK: Exports lift Fuller, Smith & Turner beer sales
- Half-year operating profits at Fuller's Beer Co up by 12% to GBP4.6m (US$7.1m)
- Net sales rise by 7% to GBP54.9m
- Total group net profits dip by 2% to GBP13m
- Brewer exporting one sixth of its beer production as UK market struggles
Russia, Far East is the focus for London Pride brewer Fuller's
Fuller, Smith & Turner has said it will soon be exporting more beer than it sells in its own pubs in the UK, after seeing international thirst for London Pride lift half-year profits at its brewing business.
Fuller's said today (25 November) that, despite what the firm described as "staggering" duty tax rises on beer in the UK, operating profits at Fuller's Beer Co rose by 12% for the 26 weeks to 1 October, to GBP4.6m (US$7.1m). Net sales rose by 7%, to GBP54.9m.
Wine sales and strong export demand helped to offset ongoing tough times in the UK beer market, and in the on-trade in particular. Fuller's own-beer volumes rose by 2% globally on the same six months of last year, but export volumes leapt by a fifth.
"One in six barrels of Fuller’s beer is now shipped abroad and we expect this channel to overtake sales volumes to our own pubs by the end of the year," said the London Pride ale brewer. Russia, the Baltic states and the Far East are a particular focus for the group, which is investing GBP4.5m to increase tank capacity at its brewery in Chiswick, south London.
Nevertheless, Fuller's unleashed strong criticism of the beer duty system in the UK. In real terms, and including a rise in value added tax from 17.5% to 20%, beer duty has risen by 35% since March 2008. The Government's duty escalator projects another 2% above-inflation increase in the next UK Budget, due in March 2012.
"The UK consumer now pays eight times the duty French consumers pay and more than 11 times the German and Spanish rates," said Fuller's. "From a UK fiscal perspective, volumes are down and VAT receipts are further reduced by driving trade out of pubs and into supermarkets." It warned of further job losses in the sector.
For the entire Fuller's business, including its managed and tenanted pubs, net profits for the half-year dipped by 2.2% to GBP13m. Operating profits, however, rose by 1% to GBP17.8m. Net sales increased by 6% to GBP128.2m.
There was a slight discrepancy in that the corresponding period of last year covered the 26 weeks to 25 September, whereas the most recent period covered the 26 weeks to 1 October.
For the company announcement, click here.
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