Coors earnings slump 47% in UK

Coors has reported a whopping 47% drop in pretax income for its second trading quarter on last year in the UK.

The brewer blamed the drop from $40.5m to $21.5m on "higher input inflation, higher pension costs and lower volumes".

It said: "During the second quarter, the UK beer industry continued to suffer from weakening economic conditions, smoking bans, and accelerating commodity and materials inflation."

Coors own brand beer volumes, including Carling, decreased 2.6% in the quarter.

Despite the downturn, Molson Coors said its UK business had gained market share in both the on and off-trade.

Net sales in the UK increased 3.4% driven by the acquisition of Camerons on-premise distribution business.

Own brand net sales per barrel increased 0.6% due to higher on-trade premise pricing.

The cost of a barrel rose by 11.9% in the quarter due to energy, raw material costs and higher pension expense.

Overall, Molson Coors saw second quarter net profit tumble 56% to $80.9m.

It reported net sales increase of 4.8% to $1.76 bn while volumes increased 0.9% to 11.6m barrels.

The major achievement of the quarter was the merging of its US operations with SABMiller to form MillerCoors.

"Energy and commodity inflation has become a bigger challenge for our company and for the global beer industry," said Molson Coors president Peter Swinburn.

"This cost inflation, combined with our higher tax rate, drove lower after-tax income for our total company in the quarter.

"In the face of challenging economic conditions, we continue to implement value-adding strategies that will allow us to build our brands, achieve positive pricing, reduce costs, and grow profits and cash for our shareholders."