Molson Coors UK profits drop by £14.5m
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.”
