Expansion on menu for Admiral as C&C invests
Admiral Taverns, the UK pub chain in which Bulmers owner C&C has agreed to buy a 47pc stake, is understood to have plans to significantly boost its estate of 845 pubs over the next three years.
The ambitious expansion plan will give C&C a greater direct-to-market platform for its broad range of drinks, with its craft drinks likely to be among the biggest beneficiaries, according to C&C chief commercial officer Mark Boulos.
C&C has agreed to pay £37m (€40.2m) for its stake in the pub chain, which operates mainly in England and Wales.
The remaining 53pc of the chain is being acquired by Admiral management in conjunction with Proprium Capital Partners, an employee-owned real estate fund manager spun out from Morgan Stanley in 2013.
Admiral has been sold by US hedge fund firm Cerberus, which acquired it in 2012 for £200m from banking group Lloyds, which in turn took a £500m hit when it sold to Cerberus.
Admiral Taverns is a tenanted pub chain, where its pubs are rented by and managed by landlords.
It competes with managed pub chains such as Mitchells & Butlers, one of Britain's largest operators of pubs and restaurants. Irish horse-racing tycoons John Magnier and JP McManus are substantial shareholders in Mitchells & Butlers, with their Elpida vehicle owning 23.1pc of the company.
In a hugely competitive UK cider market, C&C - whose Bulmers brand is sold as Magners there - has often struggled to find momentum in the on-trade sector.
Read more: UK pub deal can help C&C get back on track
But Mr Boulos said the deal will provide an important entry point for its stable of brands, particularly its niche, higher margin products.
"The tenanted pub model is much more fluid and dynamic, and you can be much more responsive to consumer demand," he said. "We think that we can get a lot of our more craft and niche portfolio of brands into the estate. That's what appeals to the consumer at the moment."
The brands likely to benefit most include its recently acquired Orchard Pig cider. Mr Boulos said C&C's English cider brands - it owns drinks including Gaymers and Addlestones - should also betnefit from better exposure.
"The beauty for the tenant and the customer is that these are brands you can't find in a supermarket for a quid a can," he said, adding that Admiral will continue to focus on drinks rather than food offerings.