THE blitzkrieg of so called "alcopops" brands on the low alcohol soft drinks market has been sudden and devastating. Apart from the obvious social implications the commercial impact on companies producing more conventional "soft" drinks may be enormous.
The first casualty in the marketing battle of colourful alcoholic lemonades with in your face brand names emerged in Britain this week. Publicly quoted cider company Matthew Clark, which also produces Babycham, said that fierce competition from the 100 or so alcopops on the market would "materially affect" current year results. The red pencils came out as investors ran for cover sending the share price into freefall. The shares, worth £8 earlier in the year, nosedived by 250p immediately after the warning, the rate of decline speeding up during the remainder of the week, halving the share price to 343p and wiping over £300 million off the firm's market value.
A spokesman for the company said that severe competition from drinks which did not exist a year ago will necessitate "a fundamental rethink of our marketing strategy". The crisis leaves the management open to searching questions on why it was so spectacularly unable to defend its brands. Not surprisingly brokers have sharply lowered profit projections
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