TIDMCCR
C&C Group plc agrees expanded manufacturing and distribution
partnership with AB InBev, including new distribution arrangements
for Magners in England, Wales, the Channel Islands and the Isle of
Man
Dublin, London | 12 December 2016: C&C Group plc ("C&C"
or the "Company"), a leading manufacturer, marketer and distributor
of branded cider, beer, wine and soft drinks in Ireland and the UK,
today announces that it has entered into expanded distribution and
contract brewing agreements with AB InBev UK Limited ("AB InBev"),
in respect of their respective cider and beer portfolios in the UK
and Ireland (the "Expanded Partnership Agreements").
Key points of the Expanded Partnership Agreements:
-- under a new distribution agreement AB InBev will be responsible for
the sale and trade marketing of C&C's cider portfolio
(including
Magners, Chaplin & Corks and Blackthorn) in England, Wales,
the
Channel Islands and the Isle of Man, including on and
off-trade
national accounts;
-- the existing contract brewing arrangements with AB InBev have been
renewed and extended, whereby C&C will continue brewing,
kegging,
bottling and canning certain AB InBev products, including
Stella
Artois at C&C's Wellpark Brewery in Glasgow;
-- the existing distribution arrangements with AB InBev, by which C&C
distributes AB InBev's beer portfolio (including Becks, Stella
Artois,
Budweiser and Corona) in Ireland, Northern Ireland and Scotland
have
been amended and reconfirmed;
-- no consideration is payable by either party on signing of the Expanded
Partnership Agreements, which will come into effect over the
coming
months, and are long term, multi-year contracts; and
-- the Expanded Partnership Agreements are expected 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, Wales, the Channel Islands and the Isle of Man.
Stephen Glancey, CEO of C&C Group, said:
"We are delighted to renew and expand the scope of our long term
partnership with AB InBev, the world's leading beverages company.
The agreements leverage the manufacturing, distribution and
portfolio strengths of our two businesses in our core markets in
the UK and Ireland. AB InBev will represent Magners and our other
cider brands in England, Wales, the Channel Islands and the Isle of
Man and to UK national accounts alongside their portfolio of
leading global beer brands.We will continue to sell and distribute
AB InBev's beer brands into the independent on and off-trade in
Scotland, Northern Ireland and the Republic of Ireland alongside
our "local champion" brands - Tennent's, Magners and Bulmers and
our growing portfolio of speciality beers and ciders. We have also
renewed and extended our existing contract manufacturing
arrangements to brew and package an increased volume of AB InBev's
beer portfolio at our Wellpark Brewery.
We are excited by the increased opportunities from combining
Magners and our other cider brands with AB InBev's leading
portfolio of beers, marketing expertise and distribution
capability; particularly in England, Wales, the Channel Islands and
the Isle of Man and amongst national accounts. Magners Original
transformed cider-drinking 10 years ago and this rich heritage is
resonating with consumers again as the brand is firmly back in
volume growth. We are confident that it will flourish further
within the enhanced platform that our expanded partnership with AB
InBev will bring.
We have been manufacturing and distributing AB InBev's beer
brand portfolio in our core territories of Scotland and Ireland
since the acquisition of the Tennent's business from AB InBev in
2009. Today's renewal of these agreements is testament to the
strength of our distribution networks across Ireland and Scotland
and our leading positions and brands in these territories; and
underscores the quality and efficiency of our manufacturing
facilities."
Jason Warner, President, AB InBev UK & Ireland, said:
"AB InBev has had a close, strategic partnership with C&C
since 2009 and we are very happy to announce today that we're
strengthening our business ties. The new and extended contracts
will utilise AB InBev's world class distribution network to bring
people in England, Wales, the Channel Islands and the Isle of Man
more choice in the cider category.This partnership will provide our
customers in both the on and off-trade with a renowned,
complementary portfolio including Budweiser, Corona, Stella Artois,
Goose, Camden, Magners, Chaplin & Cork's, Blackthorn and K from
AB InBev."
Background to and rationale for the Expanded Partnership
Agreements
C&C has been manufacturing and distributing the AB InBev
beer brand portfolio, in Scotland and Ireland since the acquisition
of the Tennent's business from AB InBev in 2009. The success of
these arrangements to date demonstrates C&C's intimate
knowledge of these territories, and validates the strength of our
distribution platform and our local brands.
As reported in our recent interim results, the Magners brand is
enjoying renewed volume growth in the UK, with volumes +11%
(year-on-year) in the six months to 31 August 2016. However, we
have often stated that for Magners and our other cider brands to
realise their full potential, particularly in England, Wales and
amongst national accounts, they would benefit from an improved
distribution channel. AB InBev is the world's largest brewer and
its beers - which include Budweiser, Stella Artois, Beck's, Corona,
Leffe and Hoegaarden are amongst the best known premium beer brands
in the UK and Ireland. Magners and the C&C cider portfolio will
benefit from being marketed as part of this wider portfolio of
strong beer brands and from the greater distribution reach and
capability that AB InBev can bring.
Summary of the distribution agreements
A summary of the two distribution agreements by territory are
set-out below. The distribution agreements will come into effect
over the coming months and are long term, multi-year agreements.
Each distribution agreement is subject to standard termination
rights by both parties, minimum purchase obligations and provisions
in respect of marketing. The distribution agreements are
inter-conditional. No consideration is payable by either party on
signing of the distribution agreements.
1.Distribution of AB InBev beer brands in Scotland and
Ireland
C&C will continue to have the rights to sell and distribute
AB InBev's beer brands in Ireland, Northern Ireland and Scotland to
independent on-trade and off-trade customers. The agreement is in
respect of AB InBev's current beer brand portfolio (save for
Budweiser in the Republic of Ireland) and any future acquired or
launched beer brands in these territories. The distribution rights
exclude national on and off-trade account customers, and are
effective immediately.
2.Magners and C&C cider portfolio distribution agreement in
the UK
AB InBev will market and sell all of C&C's cider brands
including Magners, Chaplin & Cork's, and Blackthorn to all on
and off-trade customers in England, Wales, the Channel Islands and
the Isle of Man and national account customers in the UK, save for
certain national account customers where Magners has existing
multi-year supply agreements. The sales and marketing
representation will become effective from Q1 2017 and AB InBev will
also assume responsibility for the distribution logistics of
C&C's cider brands after a transitional period of up to 12
months.
C&C retains ownership and brand management of all its cider
brands and will continue to manufacture at its cidery at Clonmel,
Co. Tipperary. C&C also retains responsibility for sales,
marketing and distribution of its cider portfolio into its core
customer base of the independent trade in Scotland, Northern
Ireland and Ireland, as well as retaining full distribution rights
to the brands in North America and all other Export markets.
C&C will also continue to be responsible for the marketing and
distribution across the UK of its own portfolio of specialist beers
including Menabrea and Heverlee.
Summary of the contract brewing agreement
C&C has extended its existing contract brewing arrangement
with AB InBev. Under the extended agreement, C&C will continue
brewing, kegging, bottling and canning certain AB InBev products,
including Stella Artois at C&C's Wellpark Brewery in Glasgow.
C&C has undertaken to make a certain minimum level of brewing
capacity available and AB InBev has undertaken to order increased
minimum quantities during the term.
The renewed contract brewing agreement will come into effect
immediately and is a long term, multi-year agreement. No
consideration is payable by either party on signing of the contract
brewing agreement.
Financial effects of the Expanded Partnership Agreements
In aggregate, the board of C&C expects the Expanded
Partnership Agreements 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, Wales, the
Channel Islands and the Isle of Man.
About C&C Group plc
C&C Group plc is a premium drinks company which owns,
manufactures, markets and distributes branded beer, cider, wine,
soft drinks and bottled water. C&C Group brands include:
Bulmers the leading Irish cider brand; Tennent's, the leading
Scottish beer brand; Magners the premium international cider brand;
Tipperary Water; Finches soft drinks, as well as a range of niche,
premium and craft ciders and beers. C&C Group also owns and
manufactures Woodchuck, a leading craft cider brand in the United
States and manufactures and distributes a number of 3rd party
international beer brands in Scotland and Ireland. C&C is also
a leading drinks wholesaler in Scotland and Ireland, where it
operates under the Tennent's and C&C Gleeson brands
respectively. C&C Group is headquartered in Dublin with
manufacturing operations in Co.Tipperary, Ireland; Glasgow,
Scotland; and Vermont, US. C&C Group plc is listed on the Irish
and London Stock Exchanges.
Notes
Certain information contained in this announcement would have
constituted inside information (as defined by Article 7 of
Regulation (EU) No 596/2014) prior to its release as part of this
announcement.
This announcement includes forward-looking statements, including
statements concerning current expectations about future financial
performance and economic and market conditions which C&C
believes are reasonable. However, these statements are neither
promises nor guarantees, but are subject to risks and
uncertainties, including those factors discussed on page 13 of
C&C' interim results for the period ended 31 August 2016 that
could cause actual results to differ materially from those
anticipated.
Contacts
C&C Group plc
Stephen Glancey | Group Chief Executive
Kenny Neison | Chief Financial Officer
Joe Thompson | Head of Investor Relations
Tel: +44 7980 844 580
Email: Joe.Thompson@candcgroup.com
FTI Consulting
Mark Kenny
Jonathan Neilan
Tel: +353 1 663 3686
Email: CandCGroup@fticonsulting.com
Novella Communications
Tim Robertson
Toby Andrews
Tel: +44 203 151 7008
Email: TimR@novella-comms.com
View source version on businesswire.com:
http://www.businesswire.com/news/home/20161211005091/en/
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(END) Dow Jones Newswires
December 12, 2016 02:00 ET (07:00 GMT)
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