Scottish & Newcastle managing director John Dunsmore has rubbished claims that controversial low pricing deals in the multiple grocers are irresponsible and damaging for business.
"There is a misconception in the on-trade in particular that the multiples have us over a barrel when it comes to price. This is not the case," he said as the brewer unveiled its 2006 year-end results last week.
"We have a very constructive dialogue with the supermarkets over pricing and using alcohol as a loss-leader. They are very enlightened about the responsibility issues."
The comments mark something of a turnaround for the brewer. Last November its off-trade sales MD told The Grocer it "continued to despair at the level of value taken out of the category at times of peak demand."
Its latest results suggest that it has managed to weather the storm, however. A good performance in the UK off-trade helped it post a 14% rise in profit last year to £452m, despite declining beer sales in the on-trade. Its overall branded beer and cider sales grew 3.8% by volume in a UK market up just 0.7% overall.
Value sales were also up 4.5%, indicating S&N has managed to maintain prices. Beer grew 2.1% by volume in the off-trade. "It was a BBQ and World Cup summer and all our top three beer brands (Foster's, Kronenbourg 1664 and John Smith's) outperformed the market," said Dunsmore.
Cider sales were also strong, despite strong competition from Magners. S&N posted a third consecutive year of double-digit sales growth, with Strongbow up 12.9% by volume, albeit below the market growth rate of 19.8%. "We are growing share in the 'over ice' market with brands such as Sirrus, and Bulmers Original," said Dunsmore.
The 4% decline in on-trade beer sales, however, was "disappointing", he said, adding that its plans to cut costs by £50m over the next three years would result in UK job losses.