InBev deal may help Magners finally crack open English market
Bulmers-owner C&C has agreed a deal handing distribution and marketing of its ciders in England and Wales to beer giant AB InBev.
The distribution agreement could finally see the Magners brand break into the English market, where it has struggled to nail down a successful route to market despite a well- received launch a decade ago.
An expanded manufacturing and distribution deal with AB InBev will now see the Belgian-headquartered firm take over responsibility for the sale and trade marketing of C&C ciders in England, Wales, the Channel Islands, and the Isle of Man.
The company's existing distribution agreement with AB InBev remains in place, meaning the cider-maker will continue to distribute AB's beer portfolio, which includes the likes of Beck's and Stella Artois, in Ireland.
No payment will be made in either direction as a result of the multi-year deal, which will come into effect over the coming months.
C&C said it will be earnings neutral in the first full year of operation and accretive thereafter, driven by increased volumes and value.
C&C ceo Stephen Glancey said he was delighted with the expansion of the deal.
"The agreements leverage the manufacturing, distribution and portfolio strengths of our two businesses in our core markets in the UK and Ireland.
"AB InBev will represent Magners and our other cider brands in England, Wales, the Channel Islands and the Isle of Man and to UK national accounts alongside their portfolio of leading global beer brands," he said.
As part of the deal C&C will also continue brewing, kegging, bottling, and canning certain AB products, including Stella Artois.
C&C has been making and distributing AB's beer portfolio in Ireland and Scotland since the acquisition of Tennent's business in 2009.
Mr Glancey said the renewal "underscores the quality and efficiency" of the cider-maker's manufacturing facilities.
The deal will see C&C sell and distribute AB's beer brands in Ireland except for Budweiser. The distribution rights exclude national on and off-trade accounts.
AB InBev UK and Ireland president Jason Warner said the company was happy to renew the agreement with C&C.
"The new and extended contracts will utilise AB InBev's world class distribution network to bring people in England, Wales, the Channel Islands and the Isle of Man more choice in the cider category," he said.
The agreement will add to further cost efficiencies at C&C which incurred nearly €40m in restructuring costs last year.
The company announced earlier in the year that it was to close two plants - one at Borrisoleigh in Co Tipperary and a second at Shepton Mallet in England, with the loss of around 270 jobs.
In October an activist investment fund backed by Egyptian billionaire Nassef Sawiris became the company's largest single shareholder.