By Geoff Percival
Cider and beer maker C&C Group intends to invest up to €2m on increasing capacity at its Irish brewing facilities — either in Dublin or Clonmel — in the near term.
Chief executive Stephen Glancey said the spend would be between €1m and €2m, but didn’t clarify if it would be used to boost Bulmers cider production in Tipperary or that of the Five Lamps craft beer label, which is brewed in Dublin.
C&C bought Five Lamps outright last year after previously owning a majority share of the company and is exploring the long-term possibility of exporting the beer into the UK market.
Mr Glancey also said that C&C has received approaches from a number of drinks groups to act as a contract brewer for them after Brexit, but it is unclear whether such plans will progress. Speaking on the back of a disappointing — if largely expected — set of annual figures, Mr Glancey said Ireland remains “a very attractive market”, which should see a degree of earnings stabilisation in the current year.
In the 12 months to the end of February the Dublin-headquartered Bulmers/Magners cider and Tennent’s lager maker generated revenues of €548.2m, down nearly 5% on the previous year. Group operating profit fell by 7% to €86.1m.
However, sales of Tennent’s in Scotland helped boost the group’s earnings in the UK — profits, there, growing nearly 4% and revenues jumping by 4.3%. C&C has been turning around its fortunes in the UK over the past year via a distribution deal with brewing giant AB InBev; the purchase of a significant stake of pub group Admiral Taverns; and most recently buying distributor and wholesaler Matthew Clark Bibendum.
In Ireland — where C&C lags Diageo and Heineken in the long-alcoholic drinks market — revenues fell by 4.4% to €312.1m and operating profit dropped nearly 7% to just over €40m. Revised terms of its distribution rights for AB InBev’s beers in Ireland, the extended severe winter weather, and an “intense” competitive landscape were cited as reasons. Diageo and Heineken launched new lager and cider products on the market during the year.
However, Bulmers grew its share of the off-trade market — which accounts for over 60% of Irish cider sales — to 57%. Mr Glancey also said he expects to see some earnings improvement in the US this year, after another disappointing year there.