Molson Coors has defended a sharp sales decline on Carling as a "price worth paying" for refusing to pursue low or no margin volume on its brands, The Grocer can reveal.
In the past year, Carling has slipped from being the UK's second-biggest alcohol brand to third the only top 10 brand to lose value, according to our Britain's Biggest Alcohol Brands survey in this issue.
Sales of the Molson-owned lager slumped 11.2% to £337m and volumes dropped 14.6% [Nielsen 52 w/e 20 March 2010].
Carling had lost distribution after putting prices up 10% (excluding duty) last December, said the beer buyer for a national retailer.
"As a consequence of a fairly shocking sales update last year, Molson realised it was selling too much at too low a price, so it forced through an increase of 6.9ppl or 10% [excl duty] on Carling in December," he said. "Trading agreements were reviewed and it lost distribution across the multiples, which dented the brand's sales performance."
The price of a 4x440ml pack has jumped 10.3% over the past year from £3.46 to £3.81, according to Brand View.
Molson Coors sales director John Heynen said it refused to join other brewers who focused single-mindedly on price at the expense of margin.
"We're going to do it differently, as we believe it makes sense for the long-term health of the category," he said. "Some short-term share reduction is a price worth paying to ensure our category remains vital, valued and relevant going forward."
Heynen said the beer industry was facing a "fundamental challenge, as retail beer prices remained stuck in the 1990s" despite increases in excise duty.
"We set out 18 months ago to focus on value ahead of volume with an ambition to ensure that the beer category is well invested, innovative and profitable over the medium to long term," said Heynen. "The alternative of a commoditised category where the only driver that counts is low pricing is, in our view, unsustainable."
In the past year, Carling has slipped from being the UK's second-biggest alcohol brand to third the only top 10 brand to lose value, according to our Britain's Biggest Alcohol Brands survey in this issue.
Sales of the Molson-owned lager slumped 11.2% to £337m and volumes dropped 14.6% [Nielsen 52 w/e 20 March 2010].
Carling had lost distribution after putting prices up 10% (excluding duty) last December, said the beer buyer for a national retailer.
"As a consequence of a fairly shocking sales update last year, Molson realised it was selling too much at too low a price, so it forced through an increase of 6.9ppl or 10% [excl duty] on Carling in December," he said. "Trading agreements were reviewed and it lost distribution across the multiples, which dented the brand's sales performance."
The price of a 4x440ml pack has jumped 10.3% over the past year from £3.46 to £3.81, according to Brand View.
Molson Coors sales director John Heynen said it refused to join other brewers who focused single-mindedly on price at the expense of margin.
"We're going to do it differently, as we believe it makes sense for the long-term health of the category," he said. "Some short-term share reduction is a price worth paying to ensure our category remains vital, valued and relevant going forward."
Heynen said the beer industry was facing a "fundamental challenge, as retail beer prices remained stuck in the 1990s" despite increases in excise duty.
"We set out 18 months ago to focus on value ahead of volume with an ambition to ensure that the beer category is well invested, innovative and profitable over the medium to long term," said Heynen. "The alternative of a commoditised category where the only driver that counts is low pricing is, in our view, unsustainable."
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