DRINKS group, Cantrell & Cochrane has reported a 28 per cent rise in pre tax profits to £24 million in the six months to the end of August last.

Sales rose by 26 per cent to £174 million compared with £137 million in the same period in 1994. But fierce competition between rival grocery chains has hit margins in the soft drinks market and will inevitably lead to job losses at its Dublin plant, it says.

A restructuring programme to improve long term competitiveness is currently being implemented, according to C&C and discussions on reducing the workforce are ongoing between management and unions at the plant.

The high exchange rate against sterling is also putting a "serious constraint" on profit margins, C&C group managing director Mr Tony O'Brien said. This loss of margin, he added is also preventing investment in the marketing of its brands which he warned could bring serious long term implications.

Interim figures issued yesterday, which reflect an exceptional charge of £1.5 million for rationalisation costs during that period, show a 24 per cent rise in operating profits to £22.6 million from £18.2 million in the previous year.

A long hot summer and booming tourist trade led to increased sales of its leading brands - Ballygowan, Bulmers Cider, Miller beer and Club soft drinks - over the six month period, it said yesterday.

In continental Europe, its aperitif Aperol and Aperla Soda were the biggest sellers, while sales of spirits and liqueurs fell in the Republic and overseas.

The group says that the strength of the Irish pound against sterling over that period hit profits on its exports, blaming unprecedented increases in packaging material costs for a further downturn in profits.

In Northern Ireland, it says the peace process appears to have contributed to a rapid increase in tourism and a return to normal pub going helping to boost sales.

In Britain, it claims Ballygowan became the best selling mineral water in pubs. Internationally, Frangelico liqueur continued to gain market share in South American and in the Mediterranean states.

In what it says was a "tough" whiskey market, C&C reports that sales of its Tullamore Dew whiskey progressed well, showing particularly good growth in Central and Eastern Europe.