C&C, the Irish group behind Magners cider, chose to toast Friday 13th with truly dismal news of recent trading. Full-year operating profits, once expected to grow between 15 per cent and 20 per cent, will now be flat, at last year’s €199.6 million.
Like many companies before it, and no doubt many after it, C&C is blaming the weather for taking the fizz out of cider sales. This make sense – but only to a certain extent.
C&C has been phenomenally successful in positioning Magners both as a summer and winter drink through extremely smart marketing, and it is highly likely it didn’t quite know how to position the drink in the recent changeable weather. But there other factors at work here, firstly increasing price competition from rivals and secondly, the possibility that the success of Magners may be beginning to lose its amber glow.
The market has been swept away in the C&C boom, and today’s profit warning has brought it down to earth. C&C is far from being a failure but investors would be sensible to reduce their stakes as the company finds its way out of the mire.