C&C, the maker of Bulmers/Magners cider, has
begun a restructuring of its struggling operation in England and Wales.
The company has combined its three separate businesses in England and Wales into a single division, C&C Brands. Previously it operated in the region using a triumverate of trading units: Magners GB, The Shepton Mallet Cider Mill and International Wine Services.
The combined streamlined operation will be more “efficient”, the company said, freeing up cash to invest in its brands such as Magners, Blackthorn and Ye Olde English. It is expected there will be a small number of redundancies as the three old divisions combine their sales teams.
"We have some exciting developments to come in 2015 which, under the new structure, we will be better placed to promote," said Andrea Pozzi, the managing director of the new division.
Wider strategy
Mr Pozzi said the C&C Brands consolidation was part of a “wider strategy...to build long-term sustainable growth” for its operations in England and Wales.
In January C&C warned that profits would be about €10 million lower than expected because of poor cider sales in the England/Wales region, where it has suffered from distribution problems and intense competition from other ciders, such as Heineken's Strongbow. The Irish Times revealed last week that Third Avenue Management, a New York-based fund with a stake in C&C, recently told its investors that management was "actively evaluating" its options for the region.
"[This] could take several shapes including an acquisition, a partnership or a divestiture of the UK business altogether," said Third Avenue fund manager Matthew Fine.
It is understood that C&C will most likely not pursue another acquisition of a pub company after it decided in January against formally launching a €1 billion bid for the Spirit Pub Company.
The company could yet decide to buy an English distribution company, similar to deals it has pursued in Scotland and Ireland, which would give it more shelf space in off-licences.
Another brewer
It could also merge its English/Welsh division with another brewer, perhaps in a joint venture, or recalibrate it as a niche producer.
Or it could decide to sell the division, bulwarked by the Magners brand, to one of its bigger rivals with more marketing power.
Institutional investors such as Morgan Stanley have been stake-building in C&C in recent weeks as expectations mount that it will take a strategic decision in relation to the future for its English/Welsh business.
