Duty rises and price freezes will hit C&C Group's comparative trading performance in the coming year.
The Irish drinks group, which numbers Magners cider and Tennent's lager among its brands, said cider volumes in the UK were nearly three per cent lower in the two months to the end of April than the same period last year, when C&C undertook a lot of promotion, primarily in the off-trade.
Volumes in the UK pub sector were down 14 per cent, versus flat growth across the sector. The introduction of Magners Pear into the pub trade and growth in sales of its draught ciders helped improve its performance in 2008/09, when sales slumped nearly 30 per cent.
C&C said lower promotional activity in recent months had resulted in its 'volume to value' ratio moving into positive territory, despite it taking the last duty rises on the chin.
The group warned it would experience a "volatile year-on-year comparative performance", thanks to what it called "the substantial increase" in cider excise duty, together with its own decision to hold prices for Magners.
This volatility would remain "until the UK cider duty regime is clarified", C&C added.
George Osborne, the chancellor of the exchequer, is due to announce his emergency budget on June 22. Before the recent general election the Conservatives had committed themselves to scrapping Labour's 10 per cent cider duty increase.
C&C meanwhile reported annual turnover for the year to February 28, 2010, up 16.4 per cent to €568.8m.
Operating profits were down nearly 11 per cent at €83.2m, "modestly ahead of previous guidance".
C&C declared it would pay a total dividend of six cents per shares, down a third on 2008/09.
The group said its total UK cider volumes rose nearly 12 per cent on the previous year, including a contribution from Gaymers, which C&C acquired in 2009.
Magners cider volumes fell nearly five per cent year-on-year, despite the cider market growing by seven per cent, fuelled, C&C said, by growth in the off-trade.
The group said it remained cautious as to the macro economic outlook for the UK, but was "confident in its brand strengths and trading strategies".