C&C Deal An 'Opportunity To Restore Budweiser To Its Former Glory' In Ireland, Says Analyst
The announcement that C&C Group is to take over the distribution of Budweiser and Bud Light on the island of Ireland could be an 'opportunity to return Budweiser in Ireland to its former glory', a leading industry analyst has said.
Greg Johnson of Shore Capital was commenting following the announcement that Magners cider maker C&C was adding AB InBev's complete Budweiser Brewing Group portfolio to its Ireland distribution offering, commencing 1 July 2020.
This means that brands such as Stella Artois, Beck’s, Corona, Leffe and Hoegaarden will be distributed in Ireland by C&C Group, and bring an end to Budweiser's association with Diageo in Ireland.
'Vote Of Confidence'
The deal is "a a big vote of confidence in C&C from AB Inbev in the group’s capabilities and prospects, further entrenching an existing strong long-term relationship," Johnson commented.
"Longer-term, we believe that there is the opportunity to return Budweiser in Ireland to its former glory (previously one million-hectare litres). It currently has an estimated 3-4% share of the long-alcoholic drink market in the on-trade, albeit volumes are greater in the more challenged off-trade."
The relationship with AB InBev across Ireland should also "strengthen" C&C Group's position in Ireland, "where it is already a respected challenger behind Heineken and Diageo," he added. "As well as an additional revenue stream, it should also aid in securing taps for Bulmers cider."
'Exciting New Phase'
Commenting on the deal earlier this week, Tom McCusker, managing director of C&C Group Ireland, said, "“This agreement marks an exciting new phase in our partnership with Budweiser Brewing Group. With a portfolio of some of the world’s most iconic beer brands, we look forward to optimising the portfolio and distribution strengths of our two businesses for the benefit of our mutual customers across Ireland."
C&C Group has been working with AB InBev since 2009, with responsibility for brewing and distributing a selection of its brands in Scotland, Northern Ireland and the Republic of Ireland.
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