Magners to defy UK slump and buy US cider firm

Magners cider company C&C has announced plans to acquire the US firm Vermont Hard Cider, despite a drop in UK sales.

C&C said the wet summer weather caused a 18.6% fall in UK sales volume in the six months to 31 August.

That slump also saw underlying sales fall 15.7% to €19.9million. Overall the group’s revenues fell 2% to €263m, while the operating profit over the six months to 31 August was €65.6m, 2.7% lower year-on-year.

Kenny Neison, group chief financial officer at C&C, said that the London Olympics failed to provide the increase in sales that the company had hoped for. He added: “The summer just hasn’t happened in terms of barbecues, parties, etc. But it’s no more than that, there are no long term messages to be read into the cider category.”

One positive for the group was a significant increase in sales in the United States, where Magners jumped by 16%; the US cider market is growing and it was because of that C&C decided to acquire Vermont Hard Cider.

Some analysts have labelled the US$305m price tag as “too high” but Mr Neison dismissed those concerns saying, “we are buying a market leading brand in the US.”

The acquisition of Vermont, which produces Woodchuck, the largest domestic cider brand in the US, is due to be completed by February, subject to regulatory approval.

C&C’s chief executive Stephen Glancey said: “This transaction transforms our international cider business and accelerates our growth prospects. We intend to invest in the company to capitalise on the growth opportunities presented by this business.”