Plummeting profits for two major brewers
Two major UK brewers have filed accounts at Companies House that indicate how difficult the UK beer business has become.
Both Carlsberg UK and Coors have filed accounts in recent weeks that show plummeting profits in the year to 31 December 2005.
Carling brewer Coors - acquired by its American parent for £1.3bn in 2002 - saw pre-tax profit drop by half to £67.2m from £134m the year before.
Turnover decreased by 13% to £1.417bn after volumes dropped by 3.1%.
A statement by Coors included in its accounts filing said: "The company's profits for the period declined significantly, largely as a result of the decline in the UK beer market, especially in the on-trade and margin pressures due to competitive discounting and retailer customer consolidation.
The company's overall volume decline for the period was slightly worse than the overall market decline A statement by Coors.
"Volume decline was driven by the Grolsch brand, flavoured alcoholic drinks and ales. The decline was partially offset by growth in the Carling brand. The company's overall volume decline for the period was slightly worse than the overall market decline.
"A change in our trading arrangement with one major factored brand customer has required us to move from gross reporting of sales and cost to a net presentation for that customer, which caused a period-over-period reduction in both sales and costs of £133.5m, with no net impact on net profit.
"Our focus is on cost reduction strategies and continued investment in our core lager brands - Carling, Grolsch and Coors Fine Light."
Carlsberg made a loss before tax of £3.8m in the year to the end of 2005, including a £9.7m exceptional charge, compared to a profit before tax of £27.1m the year before. Turnover in 2005 was £864m compared to £886m in 2004.
The company stated in its accounts filing that the result was "disappointing".
It added: "This reflects difficult trading conditions in the on-trade, a declining overall market (-2%), exceptional levels of expenditure on contract packaging (ahead of investment in new capacity) and the need to make additional payments into the defined benefit pension scheme.
"The business continued to perform well in the take-home sector where market share grew from 13.1% to 13.5%."
A source said: "Business for brewers in the independent free trade, a profitable route to market, is down while business is up in the off-trade, which is a much less profitable route."
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