C&C, the maker of Magners cider, has warned that profits will fall below market expectations after the UK supermarket price war contributed to a slump in revenues for the last four months of 2014.
The Irish company said operating profit for the year ending next month would be about €115m (£89m), down from €127m the year before and €10m less than analysts were expecting.
In England and Wales, cider sales volumes fell 9.8% in the three months to the end of November and net revenue dropped 18.2%. The trend continued in December and C&C said it would make big cost cuts at its English and Welsh operations.
In a trading update, C&C said: “In England and Wales, pressure on pricing increased in the off-trade channel, reflecting intensifying competition at both retail and brand owner points in the supply chain.
“C&C is advancing plans to significantly reduce costs, which will return the cider business to acceptable levels of profitability, expand margins and increase investment behind the brand portfolio.
“Trading over the Christmas period was again below C&C’s expectations in the domestic markets and volume trends are broadly consistent with the third quarter performance.” Sales volumes also fell 3.4% in Ireland and 2.4% in Scotland in the three months to the end of November.
C&C warned in late October that trading in England and Wales was difficult because supermarkets were battling to compete with discounters such as Aldi and Lidl. The company also said prices were under pressure because of too much supply as new brands entered the market.
C&C made a failed bid to buy Spirit, the UK pubs group, in October. The Irish company said in its trading statement it would use its strong cash flow to start buying back its own shares.
