SALES of Tennent's in the UK were down 4.7% year-on-year in volume terms in the first nine months of Irish parent C&C Group's financial year, as it revealed that its new beer brands are taking an increasing share of its volumes in the Scottish on-trade.

The group announced that in net revenue terms, Tennent's was down 2.9% for the nine months to the end of 2013, part of what it has described as a "transition year" for the company.

However, trading remained "resilient" in C&C's core Irish and Scottish markets in the final three months of the year, it reported, with trading over Christmas "satisfactory" and in line with expectations.

Loading article content

"Tennent's Lager performed well in the Scottish Independent Free Trade (IFT) channel with volumes +8% in the period," C&C said of its third quarter. This suggests that domination by Tennent's of its home lager market continues.

The group has sought to buck a tough beer market by unveiling new products. These include Caledonia Best, which goes head to head with Greene King's Belhaven Best and claims a double-digit market share in its category.

It has also developed Belgian beer brand Heverlee, which it has been selling in Scotland and Northern Ireland.

"Caledonia Best volumes and Heverlee continue to grow and, combined, they now contribute approximately 6% of C&C-owned on­-trade Scottish beer volumes," the group said.

In addition to Heverlee, it has introduced an on-trade wine portfolio in Scotland, while Tennent's stout and whisky oak beer have been launched in overseas markers.

A stronger version of Tennent's lager is on offer in Italy.

International volumes had improved in the third quarter of its financial year.

"International volumes grew in the period, driven by growth from cider and beer in Europe and some newer markets," C&C said.

Tennent's also has its sights on the small but fast-growing craft beer market.

It has entered into a 50/50 joint venture with Alloa-based Williams Bros to build a new craft brewery and brewing centre of excellence in the Drygate area of Glasgow, next to its Wellpark site.

C&C is also building a new craft brewery in Clonmel, Ireland.

C&C, which owns Magners, said the cider brand had had a tough time in the last three months of 2013 thanks to falling supermarket sales, although sales in pubs held up.

"Trading for Cider UK remains challenging," the group reported.

"The performance of the group's cider brands in the period was broadly in line with first half trading.

"Magners declined in the period driven by the multiple retail channel; on-trade volumes by comparison remained relatively steady."

It said third-party brands "performed well" in the quarter. C&C reaffirmed its guidance of full year operating profit of €125 million (£104m) to €132m.

"We maintain guidance for double-digit operating profit growth in the current financial year," C&C said.