Brewer Scottish & Newcastle (S&N) has warned that forthcoming smoking bans will hit sales. It today reported a 13.9% rise in annual pre-tax profit to of £452m and said it would cut £50m of costs.
The brewer, Europe's fourth largest, said the £50m costs savings would involve some job losses and be split between its UK and international operations. But they will have no impact on its Irish subsidiary, Beamish & Crawford, which employs 160 people.
S&N said Beamish & Crawford had a successful year, despite a decline in the Irish beer market of 2.5%.
The group said that due to a number of factors the market has seen a significant volume shift from the on trade (pubs, clubs and hotels) to the off trade (off-licences) of 10% in the last 3 years.
But Beamish & Crawford said its key brands performed well, with sales of Beamish Stout, Miller and Foster's all showing double digit growth.
Beamish & Crawford said it has reached agreement with Carlsberg USA for sale of Beamish Stout across major American cities. The company recently announced a €5m investment in a new kegging line at the brewery in Cork.
Alf Smiddy, MD, Beamish & Crawford said: 'The outsourcing of non-core activity to leading industry specialists has allowed for maximum focus on sales and marketing of the full portfolio of beer brands in the island of Ireland, and this will continue going forward'.
He said that a key factor in the drinks industry in Ireland is the sustained shift away from pubs towards the off-trade and Beamish has capitalised on this trend.
Beamish & Crawford brands include: Beamish Genuine Irish Stout, Beamish Red Irish Ale, Miller Genuine Draft, Foster's, Kronenbourg 1664 and Carling.
Overall S&N, which tops the market in France with Kronenbourg lager, Britain with Foster's and Portugal with Sagres, said it had made a pre-tax profit of £452m in the year to end-December on revenue of £4.155 billion - helped by a resurgence in cider drinking and Russians switching from vodka to beer.
Pre-tax profit had been forecast between £443m and £463m on turnover of £4 billion to £4.15 billion, according to analysts.
S&N said over the next three years it would cut costs to help it cope with rising raw material prices and the likelihood of slowing beer sales as England, Wales and France prepare to impose smoking bans in pubs.
The firm said it expected the English ban to reduce its UK pub sales by 2.5% and wipe £10m off its profits, while total UK pubs sales would fall by 5% this year, as drinkers spend less time in pubs and bars in favour of drinking cheaper supermarket bought beer at home.
