UK: Molson Coors UK business sees profits fall by nearly £15 mln
The UK arm of Molson Coors has seen its profits fall by nearly £15 mln despite an increase in turnover, The Morning Advertiser reported on November 5 citing the companys latest financial results.
The company behind brands such as Carling, Coors Light, Cobra and Doom Bar revealed a drop in pre-tax profits from £71.3 mln to £56.8 mln a decline of £14.5 mln - despite registering a 5.5% increase in turnover for the year ending 31 December, which rose from £1.35 bln to £1.42 bln.
Molson Coors also revealed a drop in on-trade volumes of 2.3%.
The 20% decline in profits has been attributed to a combination of margin reduction from pricing pressure and increased costs of goods due to commodity inflation by the brewing giant, which incurred costs of £7 mln over the course of 2017, rising from £5.6 mln, due to the restructuring of its operations, primarily resulting from the companys decision to close its Burton South Brewery in December 2017.
The Morning Advertiser, Molson Coors acquired family-owned cider brand Aspall Cyder for £40 mln, following a year of negotiations, in January 2018.
Referring to the latest figures, a statement from Molson Coors said: The UK beer market in 2017 increased 0.7% in total volume, with on-premise declining 2.3% and off-premise increasing 3.5%.
During 2017 we continued to invest behind our first choice for consumers' and customers' agenda, which resulted in the company taking volume share in both on- and off-premise channels.
Industry pricing continues to be the biggest challenge causing margin pressure in the UK beer business in both the on-trade and off-trade.
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 consumer and customer.
E-malt.com, the global information source for the brewing and malting industry professionals. The bi-weekly E-malt.com Newsletters feature latest industry news, statistics in graphs and tables, world barley and malt prices, and other relevant information. Click here to get full access to E-malt.com. If you are a Castle Malting client, you can get free access to E-malt.com website and publications. Contact us for more information at email@example.com .