Molson Coors UK benefits from off-trade focus

Even a month of international football has failed to lift the gloom hanging over on-trade beer sales in the UK, with the latest industry figures showing supermarkets in the country as the clear winners.

The FIFA World Cup coinciding with a spate of good weather may have just driven UK beer sales to their first quarterly rise in volume terms since 2006, but pubs have not taken advantage.

On-trade beer volumes fell by 6% for the three months to the end of June, while off-trade beer volumes increased by 13%, against the same period of 2009, according to the British Beer & Pub Association (BBPA).

Mark Hunter, CEO of Carling lager brewer Molson Coors UK, said yesterday (3 August) that pubs had seen a "continuation of underlying trends" in the second quarter of 2010. "The channel that won most in the World Cup was certainly the off-trade," he told analysts on Molson Coors' half-year results conference call.

The World Cup, meanwhile, has given a false picture of resurgence on the UK beer market. "Trends early in the quarter weren't significantly better," Hunter said.

More than 30 pubs close down every week in the UK on average, according to the BBPA. It pointed out, however, that this rate has slowed from around 50 per week in early 2009. 

Molson Coors launched its Home Draught system in the UK prior to the FIFA World Cup in a clear play for a greater share of off-trade beer sales in the country.

The off-trade drove a 0.7% increase in company beer volumes in the UK in the second quarter. "As a result of the company’s strategic brands being stocked by all the major grocery chains this year, the company grew strong volume and share in the off-premise channel," said the brewer in its second quarter results statement.

Despite strong discounting on alcohol by supermarkets during the World Cup, Molson Coors managed to increase net sales per hectolitre by 9% in the second quarter. Duty tax rises aside, this also reflects a better price mix, the brewer said.