C&C and AB InBev extends deal

Magners producer C&C is outsourcing the distribution of its cider portfolio through an expansion of a deal with AB InBev.

The global beer giant will take on distribution of C&C’s cider brands, which includes its flagship Irish cider brand, as well as Blackthorne, its ‘craft’ cider line Chaplin & Cork’s among others.

As part of the reciprocal agreement, C&C Group will continue brewing, kegging, bottling some of AB InBev products at the C&C Wellpark Brewery in Glasgow, including Stella Artois and Beck’s, which it will distribute across the UK and Republic of Ireland.

The two companies have worked together since 2009 and Jason Warner, President of AB InBev UK & Ireland, said he was happy to see the strengthening of business ties in what had proved to be a “close, strategic partnership”.

“The new and extended contracts will utilise AB InBev’s world class distribution network to bring people in England, Wales, Channel Island and the Isle of Man more choice in the cider category.  This partnership will provide our customers in both the on and off-trade with a renowned, complementary portfolio including Budweiser, Corona, Stella Artois, Goose, Camden, Magners, Chaplin & Cork’s, Blackthorn and K from AB InBev,” he said.

C&C Group CEO Stephen Glancey the renewal and expansion of the agreement was “testament to the strength of our distribution networks and our leading positions and brands in these territories”.

“This marks a new phase in our long term partnership with AB InBev, leveraging the manufacturing, distribution and portfolio strengths of our two businesses in the UK and Ireland,” he said, adding that he was confident the agreement would drive volumes for both companies over the longer-term.

“We are also excited about the increased opportunities we now have for our cider brands in England, Wales, Channel Islands and the Isle of Man, where AB InBev’s distribution capabilities are strong,” he added.

The cider company is looking to deliver €15m of cost savings and efficiency gains, and caused outrage in January when it announced it was to ceasing cider production in the Somerset town of Shepton Mallet – whose cider-making tradition stretches back to 1770 – and moving production to Ireland. The firm’s bottling line was sold to local firm Brothers Cider in April for €9m, and in October the family firm confirmed it was also taking over production at the cider mill, continuing to make kegged Blackthorne cider and Olde English for C&C, who retained ownership of the brands, the orchards producing the apples and the Kilver Street mill itself, according to Unite the Union, with production of the canned drinks moving to Ireland.

In the six months to 31^st August, Magners grew 11%, the company’s half year results reported, with growth also coming from its premium cider portfolio. However operating profit before exceptional items in the first half were down 7.9% to of €55.1m, down 7.9%, which the company attributed partly to a boost to marketing invesment (+€3.6m in core brands) and price support, but also due to the falling value of sterling in the wake of the Brexit vote, which had hit operating profits by €2.8m and revenues by €24.4m.