Gloom for C&C as Magners sales slump 23%

THE first month of summer brought little sunshine for drinks group C&C which saw sales of Magners cider at British pubs and restaurants slump 23% in May.

Figures released by research firm, ACNielsen also showed sales fell 35% in April over the year.

These figures compare with a 60% hike in sales of rival brand, Bulmers owned by Scottish & Newcastle (S&N).

S&N also saw sales rise 26% in April.

Last week C&C shares declined 11% to the lowest since October 2004 after it said sales have continued to fall this year.

The stock plunged 70% in 2007 as a result of record rainfall and increased competition from S&N.

Davy analyst Barry Gallagher said Magners’ weighted distribution was 61% in May compared to 68% a year previously, adding that competitor brand S&N Bulmers continues to increase its presence in pubs and its weighted distribution was 47% in May compared to 35% a year earlier.

Weighted distribution is the percentage of stores that a product is sold in but weighted by the importance of the outlets.

Mr Gallagher said S&N Bulmers made strong distribution gains in managed pub chains in May.

“It is now in 83% of these outlets, up from 75% in March. Magners distribution in these outlets is 50%,” he said, adding that the pub market in Britain remains under considerable pressure.

Magners share of the cider market was 16% in May, compared to 22% a year ago. Its share has stayed at 16% since the beginning of the year.

Draught failed to make any major impact, representing just 1% of total Magners sales in May.

Merrion analyst Gavin Kelleher said there were no major surprises in the data with Magners volume declines in line with management statements given with the AGM update last week.

“It has long been expected that such

declines were likely given the tough comparatives with Q108,” he said.

C&C rose 20 cents, or 7.8%, to €2.75 in Dublin trading yesterday.

Separately, British pub chain JD Wetherspoon, the owner of almost 700 pubs, said sales rebounded in the past 11 weeks after increased marketing of its budget beers and meals attracted Britons weighed down by higher living expenses.

Sales at pubs open a year or more rose 0.4% in the 11 weeks ended July 13. That’s an improvement on the 0.1% drop in the third quarter through April 27.