Cider market "still challenging", says C&C Group

Despite reporting cider volumes up 17 per cent in the UK in December Magners producer C&C Group still expects to announce a "modest" year-on-year decline when it reveals annual numbers in May.

With business conditions in its core cider markets remaining "challenging", C&C said turnover for the three months to November 30, 2009, excluding the contribution of the Tennents lager brand, fell nine per cent versus the same period in 2008.

Cider revenue fell 13 per cent and sales across C&C's spirits and liqueurs division fell four per cent.

Total cider volumes fell 15 per cent in the UK over the three month period, while the lift in December was helped by late ordering, particularly in the on-trade, the group said.

Meanwhile C&C's acquisition of the Gaymer Cider Company in November last year is expected to complete by the end of this month, the group said. Gaymer's was unlikely to "contribute meaningfully to operating profit in the current financial year".

The group also announced it had arranged a revised deal with Molson-Coors UK (MC) which will see MC continue to distribute draught Magners to the independent free trade in England & Wales.

C&C will distribute draught Magners to the on-trade in Scotland and to multiples in the on-trade in England & Wales. C&C will also distribute all other long alcoholic drink brands to pubs throughout the UK.

A compensation fee of £1.75m is payable by C&C to MC under the terms of the new agreement.

C&C said it expected to deliver operating profits, excluding the Tennents deal, to be towards the top end of forecasts, around the €80m (£70m) mark.