Wells & Youngs: Corona and Red Stripe loss worth £85m
The loss of Mexican lager Corona Extra and Jamaican lager Red Stripe is set to hit Wells & Youngs hard as they account for 40% of turnover — around £85m worth of business.
The two beers are both set to leave the Wells & Young's portfolio next year, following decisions by the respective brand owners not to renew contracts with the Bedfordshire-based brewer.
Wells & Young's has distributed Grupo Modelo's Corona Extra brand in the UK for 15 years and the Desnoes & Geddes-owned Red Stripe for 30 years but the companies will be taking back control of their brands from 2011.
The future of Corona Extra is currently unconfirmed while Diageo, as a majority stakeholder in Desnoes & Geddes, has said it will now look after the Red Stripe in the UK.
Wells & Young's chairman Paul Wells told the Morning Advertiser the company could be seen as "a victim of its own success."
"We are very proud of the work we have done with both brands, but particularly with Corona Extra, which we have grown from a 150,000 case brand to a 5m case brand in 15 years. You have to wonder if we hadn't been so successful if the brands would be quite so attractive."
The loss of Corona Extra in particular will make "quite an impact" on the business Wells said.
The company will now be working to reduce its overheads in a bid to make up the loss and hopes to avoid redundancies.
"I'm not going to rule out us looking for brands to replace Corona Extra and Red Stripe however they would have to be very special brands and the right brands at the right time for us. For now we are happy to concentrate on ale, in particular our Bombardier brand and Estrella Damm, which is a tremendous brand and one which we are very excited about."
