Coors reports growth in Carling

By The PMA Team

- Last updated on GMT

Related tags: Coors, Pale lager, Beer

Coors Brewers, the UK's second-largest brewer with 21% of the market, has reported growth in its key Carling brand, which accounts for more than 75%...

Coors Brewers, the UK's second-largest brewer with 21% of the market, has reported growth in its key Carling brand, which accounts for more than 75% of all its beer volume, for 2006.

However, the company, which sold 7.3 million barrels of beer in the UK in 2006 and is the first of the three major foreign-owned brewers to unveil figures for the year, reported a 4% decrease in turnover to £1.361bn as premium lager, alcopops and ales suffered volume declines.

Coors said that it has suffered "unfavourable pricing" in both the on-trade and off-trade and a decrease in the sales value of factored brands.

Profit before tax dropped 25% to £69m, primarily because of new accounting rules on retirement benefits.

The company managed to chop out £22m of costs in 2006, which was "above initial expectations and helped offset the margin loss we sustained during the period".

A Companies House report noted: "The competitive environment in the UK is likely to worsen in 2007 as smoking bans are implemented.

"Also, our cost savings opportunities are becoming smaller and more difficult to achieve versus the past two periods. Industry economics also continue to exert downward pressure on pricing driven by retailer consolidation and supplier over-capacity."

Coors' beer volume in the on-trade, which accounts for two thirds of Coors' volumes and an even greater proportion of its margin, declined by slightly more than 2% compared to 2005.

This compared to an overall industry on-premise channel decline of 4.3%, yielding a market share gain for Coors.

Off-trade volume was up by 2% compared to 2005, which meant a small market share decline.

No dividends were paid to parent company Coors Holdings Limited compared to 2005 when £37.251m was paid.

Coors strategy for 2007 has three main facets:

l Cost savings: Coors says it will implement further initiatives during 2007. It states: "Early in 2007, we also anticipate a modest flow-through of cost savings implemented in the first half of 2006. Cost savings have less of a year-on-year impact as we lap the performance of 2006."

l Investment: There will be heavy investment in the core lager brands - Carling, Grolsch and Coors Fine Light. Advertising spend around Carling has increased.

l Cold-dispense technology: During 2006, Coors installed 14,000 cold-dispense units in the on-trade, extending "our cold platform beyond Carling for a broad group of strategic brands". Coors reports this is driving sales with current retailers and providing increased distribution via new retail outlets.

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