Molson Coors UK’s profits have fallen by nearly £15m

Profits for the UK arm of beer giant Molson Coors fell by £14.5 million last year, according to results filed on Companies House last week.

Molson Coors UK, which is responsible for beer brands like Carling, Doom Bar and Cobra, made a pre-tax profit of £56.8 million in the year ending December 2017, down from £71.2 million the previous year. Overall turnover was still bouyant, rising from £1.3 billion to £1.4 billion.

The brewer, headquartered in Burton-upon-Trent, said the decline in profits was a result of ” margin reduction from pricing pressure and increased costs of goods due to commodity inflation.”

The beer company is also taking a hit from the steady decline of Britain’s pub industry, and the beer industry’s volume shift towards retail. Profit margins are typically higher in the on-trade than in supermarkets, and so continuation or acceleration of this trend could “adversely impact our profitability.”

“Industry pricing continues to be the biggest challenge causing margin pressure in the UK beer business in both the on and off-trade,” the company said in a statement.

“The company is managing pricing by channel, in the context of local competition, while staying focused on the core strategy of building strong brands for the long term and focusing on our strategy of first choice for the consumer and customer.”

Last week, Molson Coors’ US business revealed it was tapping into the burgeoning cannabis drinks market.

It has partnered with The Hydropothecary Corporation, a Canadian cannabis producer, launching a standalone startup business which will develop “non-alcoholic, cannabis-infused beverages for the Canadian market following legalisation,” according to a statement from the brewer. Molson Coors said it will launch its own cannabis drinks next year.