C&C Group , the Bulmers/Magners cidermaker, is on the lookout for more contract brewing business after it expanded its Irish and UK agreements with AB Inbev.
Belgium-based InBev, the world's largest brewer, will now be responsible for the sale and trade marketing in England and Wales of C&C's cider portfolio, including Magners, Chaplin & Corks and Blackthorn.
The move will boost the distribution of C&C’s flagship cider in the English and Welsh off-trade, where Inbev is strongest.
On the other side, C&C will continue brewing, kegging, bottling and canning certain InBev products, including Stella Artois, at C&C's Wellpark Brewery in Glasgow.
Existing distribution arrangements with InBev, whereby C&C distributes Inbev's Becks, Stella Artois, Budweiser and Corona, in Ireland, Northern Ireland and Scotland, will continue.
C&C said that the deal, known by the two companies as “Project Frederick”, will come into effect early next year, and are long-term, multiyear contracts. No cash will change hands between the parties as a result of the signing of the deal.
C&C said that the new agreement is likely to be earnings neutral in the first full year of operation, and accretive thereafter “driven by increased volumes and value, particularly in cider in England [and] Wales”.
Tennent acquisition
C&C has manufactured and distributed the InBev beer brand portfolio, in Scotland and Ireland since the acquisition of the Tennent’s business from AB InBev in 2009.
Speaking later on Monday afternoon, Stephen Glancey, chief executive of C&C, said it retains further capacity at its Wellpark brewery in Scotland to take on further contract brewing for other companies.
“In the post-Brexit world, it makes sense for brewers [selling into the UK] to retain brewing capability in the sterling area,” he said.
He said it was “quite flattering” that Inbev had expanded their deal, as the Belgian brewer “doesn’t do many partnerships”.
Mr Glancey said C&C is unlikely to pick up assets from the mega-merger of Inbev and SAB Miller, because the assets for sale are "too big" for C&C.
