C-T shake-up sees profit success

Carlsberg-Tetley (C-T) has reported better-than-expected profits after focusing on key brands and cutting costs.

The Northampton brewer's operating profits for the year to September 30 were level with 1998 at £28.8m. It follows a shake-up in the business following the ending of its original supply agreement with Allied Domecq Retailing.

A new 10-year supply agreement, which was agreed two years ago on more commercial terms, is being honoured by Bass and Punch Group, the new owners of Allied's estate.

But C-T, the smallest of the four national brewers, is undergoing restructuring and has been redirecting marketing cash into its core brands to attract new customers.

Flemming Lindelov, chief executive of parent group Carlsberg SA, said the UK subsidiary's profits were "better than expected".

"The on-going reorganisation of the company and the intensified marketing of C-T's attractive brands as well as savings, particularly on fixed costs, proceed ahead of schedule," he said.

Restructuring costs led to a dip in pre-tax profits for the international Danish-based group, falling by 26 per cent to £142m.

However, operating profit was up by eight per cent to £145.5m and turnover rose seven per cent to £2.7bn. Group sales of beer and soft drinks grew by 13 per cent.

The Danish parent company has also been restructuring to prepare itself for growing organically and by acquisition.

Lindelov said: "Excess capacity and intensified competition have speeded up the consolidation of the international beer industry.

"Carlsberg is monitoring this development closely and will continue to aim at strengthening its position as one of the world's leading international brewing companies."