Magners cider sales under pressure

The C&C Group announced in August that its key cider brands had been hit by a wet summer and the economic downturn and warned that revenues and operating profits will be under pressure during the second half.

The Irish drinks maker said its operating profit on continuing operations should be broadly unchanged in the first half as a 1.5 percentage point increase in operating margins helps offset an expected 8 percent fall in revenue.

The operating margin increase reflects the benefits of the group’s reorganization and restructuring programme, C&C said in a statement.

Revenue for the cider division is expected to be down by 11 percent - broadly in line with sales volume - but spirits and liqueurs shipments are seen rising 3 percent in the same period.

Bulmers cider volumes in Ireland are expected to fall 11 percent in the first half, while Magners volumes are expected to show a decline of approximately 15 percent in the period.

C&C said the expected return to volume growth of Magners cider in the U.K. "did not materialise" due to the worsening economic environment and competitive pressure, and a slower realisation of the benefits from market initiatives, while Bulmers cider in Ireland was hit by a poor summer.

C&C is scheduled to report first-half results through August 2008 on 9 October.