Bad weather dampens S&N beer sales

07-08-2007

Bad weather dampens S&N beer sales
Britain's biggest brewer has warned that it will struggle to meet full-year sales targets after revealing that recent bad weather in the UK has hit sales.

Scottish & Newcastle (S&N) today reported a 5.5 per cent rise in first-half pre-tax profits, but stressed that severe weather had hampered its performance in western Europe.

Nonetheless strong growth in the Russian beer market offset the negative impact of weather conditions to drive pre-tax profits in the six months to June 30th to £191 million.

Overall sales were also up 7.8 per cent to £2.1 billion.

However S&N warned that the continuation of bad weather in the UK in July was likely to make it "very challenging" to meet full-year sales targets.

"Our overall performance in the first half reflects the impact of severe weather in western Europe in June, offset by outperformance in the Russian beer market which has benefited from favourable weather," explained S&N chief executive Tony Froggatt.

"The continuation into July of exceptionally adverse weather, in the UK and France in particular, will make the achievement of this year's trading targets very challenging," he added.

S&N, which disclosed a 17 per cent fall in UK beer sales in June and an overall fall of 5.2 per cent in the first half, warned that its reported future performance in western Europe was also likely to be hit by the impact of a strike at one of its French breweries in July.

The brewer also predicted that the recently introduced smoking ban in England would impact upon sales in the second half.

"We now believe the overall impact for the second half will be a beer market down around one to two per cent and slower than expected growth in the more seasonally sensitive cider market," said S&N in reference to the anticipated impact of the smoking ban and combined effect of adverse weather conditions in July.






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