C&C Group, the owners of Tennent’s lager, has seen a rise in half year profits of 7.9% to £60.8m in the six months to the end of August. The company attributed the rise to the summer weather in its domestic markets.
However Tennent’s sales volumes declined by 5.8%, but price rises offset this in the on and off-trade, and limited the net revenue decline to 2.4%. Stephen Glancey, C&C Group CEO commented, “The Tennent’s business is performing well. We are broadening our brand portfolio, investing in trade lending and delivering volume growth in the Independent Free Trade (IFT).”
He continued, “The performance of Caledonia Best, now over 12% of ale volumes in the IFT channel and our recently launched Heverlee handcrafted premium Belgian beer is also encouraging. “Our model in Scotland continues to evolve towards a full multi-beverage platform and further progress has been made in the period with the investment in Wallaces Express in March. We also launched our own on- trade wine portfolio in the Scottish market and have been encouraged by initial progress.”
However he revealed that the cider market “remains challenging.” As a result Magners saw its volume decline by 10.4%, although there was a slight improvement in the 2nd quarter. Said Glancey, “Tennent’s provides a degree of balance to a competitive UK cider market. While Magners volume performance improved in the second quarter, fundamentals in the UK cider market remain challenging. In the period we took a decision to invest in the Magners brand to retain its strong brand identity as the leading, premium cider. Despite competitor challenges Magners remains the number one UK modern cider by volume and by value. We are also investing over €3m this year in the new sales team and brand support at the Shepton Mallet Cider Mill. While early days, we are beginning to make progress with both the Addlestones and Blackthorn brands. A broader cider portfolio will be a distinguishing factor for C&C in the evolution of the cider market in the UK and Ireland.
The results come a few weeks after the brewer announced a 50:50 joint venture with craft brewer Williams Bros, with plans submitted to Glasgow City Council for a brewery next to its Glasgow Wellpark site.