C&C eyes wine packaging as Brexit scares non-European producers

Irish drinks manufacturer C&C expects to build its wine packaging business here as concern among non-European wine-makers intensifies on the back of Brexit.

The company, which sells the Chilean Santa Rita brand in Ireland, said South American and Australian producers were looking for packaging capability that allowed access to the European market.

Chief executive Stephen Glancy said C&C was in a “good position” to capitalise on the new business, and planned to “make an investment” at its Clonmel facility to give it the capability to start packaging wine.

Mr Glancy was speaking to journalists in the aftermath of the company’s annual general meeting on Thursday, at which all resolutions were approved.

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He said the company’s Five Lamps craft beer was a key growth driver, particularly in the Dublin region, and he expected to have it in an additional 200 bars by the end of the year. It is currently stocked in just more than 300 premises.

“It’s doing very well, it’s growing, it’s resonating with younger consumers,” he said about Five Lamps.

The brand is produced in Dublin, and Mr Glancy said they may have to explore a different site in the future to keep pace with the growth, but that’s “not imminent”.

The agm came after the drinks group issued a trading update saying good weather and the World Cup had helped trading across its key markets, with Bulmers returning to growth in Ireland.

Asked about the recovery in the Bulmers brand, on which C&C last year changed its marketing direction, Mr Glancy said: “It’s not about brand investment any more, it’s the social media stuff and engagement and we need to be better at that in Ireland.

“There’ll be an announcement on stuff in the next two, three weeks on what we’re doing, but we’re quite happy with the way Bulmers is performing right now.”

Acquisition

In the update covering March 1st to July 5th, the company said it continued to make progress in service levels and operational performance at Matthew Clark Bibendum, with a new senior management team in place. C&C announced the deal to buy the UK distributor in April. As a result of that acquisition C&C has gained relationships with wine producers, something that may prove useful as it plans to grow its wine packaging business.

The company also noted the reaction in Scotland to the introduction of minimum unit pricing on May 1st had broadly been in line with expectations, with a 10 per cent drop in relative terms and low single-digit declines as the good weather buoyed sales.

Meanwhile, good weather in Ireland saw Bulmers return to “moderate” volume growth, mirroring category showing.

In a note Davy analysts said the update struck a “cautiously optimistic tone”.

“We envisage no material change to our forecasts ahead of key summer trading months; however, the solid start to FY 2019 provides a margin of safety,” analysts said.