TENNENT’S has warned of a “challenging” outlook with the key Christmas market set to be impacted as the sector reeled from the extension of the licensed trade lockdown in Scotland.

C&C, the Dublin-based owner of the Scottish brewer, and largest independent alcohol distributor across the UK and Ireland, said there was “limited near-term visibility” in the pubs sector in its six-month results.

Against a backdrop of rising coronavirus cases and fears of greater pressures being placed on the NHS in Scotland by the pandemic, First Minister Nicola Sturgeon said that hospitality restrictions would be extended by a further week, meaning bars and restaurants in central Scotland will remain shut until November 2. The Scottish Government is also to unveil a new tiered system of restrictions.

Aspects of the introduction of the Central Belt shutdown extension were criticised by business representatives, including concerns there was not enough consultation, and that the current level of restrictions could continue “indefinitely”.

Tennent’s said its off-trade volume share of lager in Scotland increased 0.7 per cent to 26.1% for the last 12 months, while the closure of pubs resulted in its on-trade volumes declined 64.8% compared to the same time last year.

READ MORE: Stuart Patrick: The five tests that must inform decisions on restrictions

It said volumes have recovered strongly since trade restarted, with distribution points currently tracking at 81%. However, sales are reduced because of social distancing and lower footfall.

London-listed C&C said: “Near term outlook for the on-trade sector remains challenging and uncertain, with the key Christmas trading period likely to be impacted by continuing restrictions across the hospitality industry.”

It said the off-trade channel was “performing strongly” and “continuing to benefit from a temporary shift in consumption dynamics”.

Revenues decreased 37.4% to €103.9 million in the period driven by the closure of the on-trade and volume moving into the lower margin off-trade channel. As a result, operating profit has reduced by €18.2m to €6.2m.

Stewart Gilliland, C&C group interim chairman, said part of the near-term focus is “securing its position”.

READ MORE: Glasgow restaurants facing forced closure

“Driven by strong demand in the off-trade and the gradual reopening of the on-trade in our core markets, the business returned to profit generation in July through to September,” he said. “The outbreak of Covid-19 coincided with our financial year end and has meant that the entire six month performance being reported today, was impacted.

“Although we expect the pace of recovery will continue to vary, as the largest independent alcohol distributor across the UK and Ireland, our business is structurally integral to the markets we serve.”

The closure extension was described as “cataclysmic” for the licensed trade while one business leader raised concerns over future shape of restrictions.

Liz Cameron, chief executive of the Scottish Chambers of Commerce, said: “Businesses in the hospitality sector and across the supply chain will be absolutely devastated that restrictions now look to be in place indefinitely.

“We were advised that temporary restrictions would help to reduce spread of the virus. But now the temporary restrictions have been extended which make it impossible for businesses to rebuild and protect jobs.”

Paul Waterson, spokesman for the Scottish Licensed Trade Association, said “there has been no consultation with the industry and as we said earlier this month, we believe these measures to be cataclysmic for hospitality operators”.

He said: “Hundreds of businesses are facing permanent closure and with that thousands of jobs will be lost and the damage could be irreparable.”

Shares in C&C closed slightly up at 179.6p, a rise of 1.35% , or 2.4p.