C&c Share Discussion Threads

[davelamport] 29/6/2007 17:13

Mr Murphy has a legal right to sell any brand, even if under tie, if he can prove that consumer demand dictates he is been disadvantaged in the market by being refused sale. That said, however, S&NPE (Snoopy to those in the Trade)are unlikely to be challenged by a single publican through the courts, and it would be difficult for Mr Murphy to prove the disadvantage.

S&N's strategy is that of 'aircraft carrier' - Strongbow is the central brand around which Jacques, Sirrus & particularly Bulmers operate as 'pickets' to undermine any brand capable of 'sinking' the big target, Strongbow. After reinjecting value into the long declining cider market, S&N's view is that cider = strongbow, everything else can be crushed. Unfortunatley for S&N, the consumer thinks otherwise. A recent conversation with an S&N instore sampling team revealed the preference for Magners in the aisles. Do not rule out an S& bid for C&C. S&N are 'holed below the water' in cider and they know it. Enough of the thin naval analogy !

BTW, Munich will probably have been selected for trial for a similar reason as to why Glasgow was chosen in 2004/5 - a high proportion of Free Trade outlets, where the ability to put a salesforce in the field and gain the required critical mass is easier than an environment in which a large proportion of outlets are under tie, forcing central negotiations & terms etc.

[eoc74] 29/6/2007 16:20

Diageo is not a rumour. Just me surmising. Looks like those figures were poor judging by the share price

[daveyboy3] 29/6/2007 15:46

How strong is Diageo rumour?

[daveyboy3] 29/6/2007 15:45

Anyone have any idea why Munich was picked, which is a bastion of beer lovers, as opposed to Frankfort or even North West France where there is a cultural leaning towards cider? Perhaps they are trying to restructure the market towards that of the UK/Irl?

[finbarr] 29/6/2007 13:43

eoc74,

'fraid not. I rely on my broker's feed.

[eoc74] 29/6/2007 13:08

I never get to see the Nielsen figures until several hours after the horse has bolted! Do you know anywhere that publishes them? Judging by the share price in the last week, they cant be too good!

[finbarr] 29/6/2007 13:05

what will the Nielsen on-trade data (to be released at 2pm) for April May 07 say for C&C?

[eoc74] 29/6/2007 12:30

Very surprised to read this today!! Aparently going better in Barcelona! share price is going nowhere at the moment.

CRACKING the German drinks market may prove a tough challenge for C&C.


A report for the company says that the beer-loving nation is not being tempted by the apple-based tipple.

The report from brokers Kepler Teather & Greenwood Merrion indicates that growth targets for C&C's Magner's cider brand may prove challenging and has resulted in a lowering of expectations from the brand.

"It is far too early to draw any conclusions on overseas test markets, but initial survey results from Barcelona show it to be significantly ahead of Munich," the broker noted.

This will not come as a surprise to followers of the cider phenomenon, as last year's huge rise in sales was in large part attributed to the great summer weather.

Analysts have noted a strong link between warm sunny weather and cider consumption, so perhaps Barcelona doing better than Munich in test campaigns should surprise nobody. Still, the report states that Magners sales per pub are ahead of the levels seen earlier this year and last June, although they still remain well below those recorded at the height of summer last year. "These results imply that the target of 40pc growth in on-trade sales may prove challenging.

"Following this survey, we are reducing our forecasts to the lower end of the guidance range," the broker said, although it added the current valuation is not demanding and that there is significant upside potential.

[davelamport] 29/6/2007 09:42

Also, formal European trials will be founded heavily on sun seeking Brits in the early days - licence agreements have existed for some time in Costa del Sol, Canaries etc. with importers enjoying significant volumes for an expat brand. However, we are right challenge markets such as Germany and core Spain. Seeding the brand will take 12-18 months, so don't look for huge upsides this year, but definitely more value to be had in year 2-3. The Magners business model is applied in all markets, so we shouldn't see a secondary route open up for the UK either (i.e. grey stock) with the ability to sap brand margin here.

[davelamport] 29/6/2007 09:35

finbarr - A facing is on-shelf space, i.e. one bottle = one facing. Magners in Tesco is currently not enjoying the space on shelf it's share of cider should command. This is provides for a significant upside to volumes; space on shelf dictate availability & throughputs instore. Currently Scotco have paid for all the space as a blocking tactic, however the superior rate of sale of Magners vs. Bulmers and it's wider consumer franchise dictate that Tesco increase its onshelf space, volumes will kick ahead.

The pack profiferation of Bulmers is also another sign of a brand that is heavily reliant on RSP to generate sales, and is consistent with S&N's tactics to undermine the profitability of Magners. However, RSP's and corresponding profitability will only suffer if Magners deviates from its declared intention to continue with ATL investment only, i.e. no margin investment in price. That is why C&C profits YE07 were more than the profits of the big four brewers combined.

[eoc74] 29/6/2007 09:27

I think Diageo must be looking at C&C as a possible target. They would be foolish not to. Guinness sales down 7% in Ireland.

[itansey] 28/6/2007 20:02

Cat100,

Fair play to you if you're going to be a Elanionaire, it'll easily blow past that price soon. I'm familiar with investor village, great website.

[finbarr] 28/6/2007 14:01

the possibility that c&c is eating into Diageo's beer market in UK is helping the share today,despite a downgrade from citigroup from e12.9 to e11.2.

[eoc74] 28/6/2007 13:37

I too saw the ads in Barca. And I did see it on sale. The problem for them is that
a. locals dont drink pints, they drink "cubatas"
b. local beer is much cheaper
c. nobody drinks cider there

Unless theyre aiming at the tourist industry only(which I doubt, considering the tv ads), I will be genuinely shocked if its a success there. Id be more hopeful about Munich.

[cat100] 28/6/2007 10:40

Friend of mine said he saw adverts everywhere in Barca. but he couldn't find it on sale anywhere :-(. My order didn't fill I may have missed the boat this time Ah well. Maybe I was been a bit greedy.I might just buy some on a dip you never know.

[finbarr] 28/6/2007 10:16

dave,

what does underfaced mean?

[eoc74] 28/6/2007 08:40

Nice analysis davelamport , you seem to know about this stuff. Have you heard anything about how the continental trials are going? Im expecting Munich to be some kind of success while I fear for the Barcelona one.

[cat100] 28/6/2007 08:24

Sleepy start today with C&C

[davelamport] 27/6/2007 22:47

Tesco is significantly underfaced as S&N have tied up short term Bulmers in store presence. As a result Tesco will provide growth in two bursts this year -firstly YoY vs. grey stock listing last summer, and secondly as Magners receives it's correct ranging. For reference see ASDA & JS fixtures. Pubco's are increasingly concerned tha the percentage margin leverage gained by stocking Bulmers is significantly offset by the reduced consumer 'switchability' from mainstream lager into the Bulmers brand. Magners is a KVI, Bulmers is not. Reduced throughputs will mean increased cash margin presure & further incentive for those pubco's - who delisted Magners to lever increased terms - to return to stocking Magners. The Magners business model is watertight in margin terms, with little terms investment preserving RSP's in the short to medium term. So, business model works, growth plans are well founded this year & they will an attractive acquisition for any major player not represented in the resurgent cider market in the uk - no longer can the brewers sideline cider as a dead category in the LAD market.

[cat100] 27/6/2007 21:49

itansey

At $22.51 I'll be an Elanionaire $1,000,000.00 in the stock.

[cat100] 27/6/2007 21:47

itansey

I'm sure you must have this link

[itansey] 27/6/2007 19:49

Cat100, i see you mentioned Elan yesterday. I'm heavily invested in it at the moment, great stock with unbelieveable potential. Things are starting to come together for the company. For anyone not in Elan have a look at it as there's serious money to be made. I'm also in Kenmare (KMR) another great purchase with plenty of steam left in it. Thoughts!!!!!!!!!

[djderry] 27/6/2007 19:03

Bought some more today.

[cat100] 27/6/2007 17:07

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