C&C's sales up as cider price cut leads to 'moderate' increase

A PRICE cut in cider in Ireland has led to a “moderate” increase in sales for C&C, a survey by Merrion Stockbrokers said yesterday.

The stockbroker said almost half of Irish publicans questioned reported that sales were “slightly” or “a bit” better since the 10 per cent wholesale price cut implemented in June for the brand, marketed as Bulmers in Ireland and Magners in Britain. A further 27 per cent said sales were “better”.

However, 12.5 per cent of publicans said the price cut may not be the only reason why sales have increased, with seasonal factors and better weather also contributing to higher sales volumes.

The survey covered 350 randomly selected Irish pubs in four regions of the country last week.

Merrion analyst Aisling Vaughan said the level of the wholesale price cut passed on to consumers by publicans varied. “There is a wide dispersion in terms of the absolute amount of the price cut, ranging from 30 per pint bottle to as much as 55 cent per bottle.”

The survey also suggested pear cider, the subject of a high-profile summer advertising campaign by the company, is reaching a “steady state” and is expected to offset weakness in the overall market.

“The success of Bulmers pear cider has rejuvenated Bulmers which had become a tired consumer brand,” the note said.

C&C appointed John Dunsmore, the former head of Scottish Newcastle, as chief executive last November as part of a move to revive revenues. The company cut prices and introduced pear and draft cider varieties earlier this year.

“Our survey of Irish pubs last week shows that the wholesale price cut is being passed through,” Ms Vaughan said in the note. “The sales response is moderate.”

C&C’s share price closed at €2.03 yesterday, down 5 cents.