Relief over UK cider-levy hike puts a fizz into C&C
SHARES in C&C hit their highest level in 20 months yesterday as Wednesday's UK budget removed long-running fears of massive cider duty increases.
The most pessimistic observers feared the UK would more than double cider duty, bringing it up to the same level as taxes on beer.
Instead, the UK upped duty on cider by just 10pc above the rate of inflation.
"It was nothing like as bad as what might have happened," said Goodbody's analyst Liam Igoe, who yesterday upped his 12-month price target for C&C from €3.45 to €3.60.
Shares in the Clonmel-based cider giant rose 3.6pc to €3.10 on Wednesday, and briefly traded as high as €3.21 yesterday, marking their highest level since July 2008.
The UK is C&C's single biggest market, accounting for just under half the drinks company's €514m sales in the year to March 2009, so duty changes there are closely watched by investors.
Bloxhams yesterday told clients the higher duty would equate to a price increase of just 1 to 3pc "which is not overly dramatic", while Davy's analyst Barry Gallagher yesterday described the impending duty increase as "manageable".