C&C loses €12m contract

C&C GROUP has lost a €12 million contract to distribute Volvic and Evian bottled water in Ireland.

French food group Danone, which owns the brands, told C&C it will terminate the contract at the end of November.

“While this termination will impact the profitability of the soft drinks and snacks division, where it accounts for turnover of €12m per annum, it is not expected to impact upon the group’s overall financial performance for the full 2005/6 fiscal year,” C&C, which owns the Ballygowan water brand, said in a statement yesterday.

No reason was given for the cancellation.

The soft drinks and snacks arm of C&C has had a difficult year.

Last week the company said in the six months to the end of August, sales of soft drinks and Tayto crisps had fallen almost 1% to €129m. Profits in the division took a hammering, down nearly 20%.

Shares in C&C dipped yesterday, losing about 1%. They have gained 107% over the last year.

The Danone contract is the second distribution agreement it has lost this year. After the takeover of drinks group Allied Domecq by Pernod Ricard, C&C will lose the right to distribute Allied brands in Ireland, worth €3m a year.

The Allied takeover also means C&C has to find a distributor for its brands abroad, which include Tullamore Dew whiskey and Carolan’s Irish cream.

A new distributor is expected to be announced later this month.

C&C is being driven by Bulmers cider sales in Ireland and Britain, where the brand trades under the Magners label.