C&C to stockpile Bulmers to beat Brexit hangover
Drinks giant hedges against tariffs threat by stocking up on summer's supply, writes Michael Cogley
Bulmers-maker C&C will begin stockpiling cider at its UK bases from the start of next year to offset the effects of a potential hard Brexit.
The Dublin-headquartered business, which also has Tennent's, Five Lamps, and Clonmel 1650 in its portfolio, performed strongly during the summer thanks to a mixture of warm weather and the World Cup.
Chief executive Stephen Glancey said the company is well positioned to deal with Britain's exit from the EU thanks to its warehousing and manufacturing footprints in both the UK and Ireland.
"We can't do any more than plan for it and we've planned for it," he told the Sunday Independent. "The contingency we have for a hard Brexit is we'll manufacture in Ireland during January and February and then we'll ship the liquids back to the UK so we can get through the summer."
Glancey said that C&C will keep its wine and spirit stock high ahead of the March deadline. The group's stable includes the Oliver & Greg's and Moondarra wine brands, as well as Odessa Vodka and Squires Gin. C&C also distributes a number of wine brands through Ireland, including Santa Rita and Yellow Tail.
Last year, the company wrote down the value of its US business by €129m, the second such move since it entered the market in 2012. It ended a distribution deal with Pabst, the largest privately-owned brewer in the US, after less than two years. Glancey said that he was optimistic about growth in the US market but insisted that no mergers or acquisitions would take place to facilitate it.
The company reported revenue of €838.7m for the first half of the year, which was boosted by sales at the recently acquired Matthew Clark and Bidendum. Around €529.5m worth of sales was generated by the newly-added UK drinks distributor. Bulmers, Tennent's, and Magners all lifted sales and market share over the past six months.
"It's been a good six months. We were helped by the weather and the World Cup, but sometimes you need a bit of help. The warm weather has brought people back to cider and consumers back to Bulmers," Glancey said. "If the sun shines people aren't going to drink a dark stout, they're going to drink a lighter product like a lager or a cider. We can't forecast what next year's weather is going to be, but if we have a normalised summer next year we're in a good position because people are back drinking Bulmers."
The C&C boss also claimed that some of the company's competitor brands had "gone backwards".
Phil Carroll, a research analyst at Shore Capital, said that C&C had delivered a "good organic performance" and that the integration of its UK distribution business was progressing well. Carroll also said that a successful Christmas period could act as a "catalyst" to a more positive rating to its current "hold" position.
Sunday Indo Business