Molson Coors UK profits drop by £14.5m

By Stuart Stone contact

- Last updated on GMT

Profits drop: the UK arm of brewing behemoth Molson Coors has revealed a drop in profits of around 20% for the year ending December 2017
Profits drop: the UK arm of brewing behemoth Molson Coors has revealed a drop in profits of around 20% for the year ending December 2017
The UK arm of Molson Coors has seen its profits fall by nearly £15m despite an increase in turnover, its latest financial results have revealed.

The company behind brands such as Carling, Coors Light, Cobra and Doom Bar revealed a drop in pre-tax profits from £71.3m to £56.8m – a decline of £14.5m - despite registering a 5.5% increase in turnover for the year ending 31 December, which rose from £1.35bn to £1.42bn.

Molson Coors also revealed a drop in on-trade volumes of 2.3%.

The 20% decline in profits has been attributed to a “combination of margin reduction from pricing pressure and increased costs of goods due to commodity inflation” by the brewing giant, which incurred costs of £7m over the course of 2017, rising from £5.6m, due to the restructuring of its operations, primarily resulting from the company’s decision to close its Burton South Brewery in December 2017.

Moreover, as reported by The Morning Advertiser​, Molson Coors acquired family-owned cider brand Aspall Cyder for £40m​, following a year of negotiations, in January 2018. 

Core strategy focus

Referring to the latest figures, a statement from Molson Coors said: “The UK beer market in 2017 increased 0.7% in total volume, with on-premise declining 2.3% and off-premise increasing 3.5%.

“During 2017 we continued to invest behind our first choice for consumers' and customers' agenda, which resulted in the company taking volume share in both on- and off-premise channels.

“Industry pricing continues to be the biggest challenge causing margin pressure in the UK beer business in both the on-trade and off-trade.

“The company is managing pricing by channel, in the context of local competition, while staying focused on the core strategy of building strong brands for the long-term and focusing on our strategy of first choice for consumer and customer.”

Related topics: Beer

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