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World Cup lifts S&N beer sales

By staff reporter , 08-Aug-2006

Beer swilling England football fans helped Scottish & Newcastle to a six per cent sales rise for the first half of the year, continuing the brewer's new momentum in the UK.

England fans may have witnessed yet another dismal performance by their football team in an international tournament, but at least they were drinking beer while they did.

The FIFA World Cup drove Britain's beer and cider market up two per cent in the first half of the year, according to Scottish & Newcastle (S&N), which said it made gains in both value and volume.

 

The football helped S&N to a six per cent sales rise to £1.99bn in the six months to 30 June. Pre-tax profits, meanwhile, jumped 12 per cent to £187m, with a £60m cost savings project on track to be completed by the end of 2007.

 

The results show S&N's core brand focus on John Smith's, Foster's, Kronenbourg 1664 and Strongbow (cider) have seen it continue out-performing a sluggish UK beer market.

 

The group has also increased its focus on core brand extensions over the last year. The brewer said its new premium cider, Strongbow Sirrus, had contributed strongly to sales growth. It also launched Foster's Twist in the UK this June.

 

S&N's sales increase came despite what it has called unfair competition from supermarkets, which it claims sell alcoholic drinks 'below cost'.

 

"We view with concern, the willingness of the major multiples to invest in relatively cheap beer and cider prices, to drive 'footfall' within this sector," the brewer told the Competition Commission recently, as part of the watchdog's probe of Britain's grocery market.

 

Outside of the UK, S&N appeared more confident about its performance in France, after applying the same core brand principles there.

 

High unemployment and a strong private label beer sector have hampered branded brewers in France over the last 18 months.

 

But, S&N said a push on Kronenbourg Red and White, 1664 and Grimbergen had increased these brands' market share by 0.8 per cent in the first half of 2006. The group has also attempted to push Foster's harder in France with promotions and free samples in some bars.

 

S&N is in the process of selling its Champigneulles brewery in Nancy in an attempt to save more money in France.

 

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