Bulmer warns on profits after cheap beer knocks cider sales

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The Independent Online
THE beleaguered cider industry was dealt a fresh blow yesterday after HP Bulmer, the UK's biggest cider maker, admitted that Christmas sales had fallen sharply. Shares in the group tumbled 96p to 310p after the group warned that profits for the current financial year are likely to be around 25 per cent lower than the pounds 29.3m it made in the year to April 1997.

Bulmer blamed a flood of cheap beer and lager imported by supermarkets over Christmas which seduced drinkers away from cider.

The strength of the pound and lower duty rates on the Continent have tempted the likes of Asda, Tesco and Sainsbury to look overseas for cheap beer, which they have brought over to Britain in huge quantities.

John Rudgard, chief executive of Bulmer, said: "It is the first time I can ever remember that beer was cheaper than cider at Christmas. A litre of beer was selling for 70p while a bottle of Strongbow was selling for pounds 1.30."

Bulmer also made the mistake of increasing the price of White Lightning, its strong cider brand. It was forced to make an embarrassing U-turn and slash prices after volumes collapses as rivals chopped their own prices.

Last year was an annus horribilis for the cider industry. Bulmer's shares have collapsed from a peak of 626p and its present woes come in the wake of a profit warning from Matthew Clark.