Magners Original Irish Cider is likely to be made in Somerset following the acquisition of Gaymer Cider Company by Magners owner C&C, claim senior industry sources.
Switching production from County Clonmel in Ireland to Gaymer's Shepton Mallet cider mill bought by C&C this week as part of the £45m deal with Gaymer owner Constellation would improve supply of Magners and cut export costs, sources claimed.
"C&C has been struggling for capacity at Clonmel," said Steve Howarth, buyer for beer, cider and spirits at Spar. Gaymer's own-label production could be turned over to making Magners, he suggested.
"Magners will be made in the UK," said another senior industry source.
C&C had historically suffered problems meeting off-trade demand for Magners, admitted COO Stephen Glancey, with latest figures showing a 7.8% fall in off-trade sales to £65.1m [Nielsen 52w/e 3 October 2009]. He said he expected the Gaymer deal to improve relationships with UK retailers through its longer history with the off-trade.
With a move to Shepton Mallet production, C&C would also be able to offset the weakness of sterling against the euro as well as export costs. Howarth explained: "C&C has to ship packaged Magners across the water to the UK, which is very expensive."
C&C also acquired a 300,000 sq ft warehouse in Avonmouth as part of the Gaymer deal, which will give C&C the UK infrastructure to "get them out of a third-party distribution deal", said a source.
The boss of a rival cider brand added: "C&C will want to move production from Ireland to Gaymer's plant in England to improve the effects of currency."
The deal would allow C&C to put Gaymers Cider on heavy promotion and protect the "premium appeal" of Magners.
"Gaymers has virtually been given away in the off-trade something C&C will emulate. It hasn't been able to heavily promote Magners as it sees it as a premium brand," the rival claimed. "It can now argue for bigger shelf space and drive greater deals with retailers."
Switching production from County Clonmel in Ireland to Gaymer's Shepton Mallet cider mill bought by C&C this week as part of the £45m deal with Gaymer owner Constellation would improve supply of Magners and cut export costs, sources claimed.
"C&C has been struggling for capacity at Clonmel," said Steve Howarth, buyer for beer, cider and spirits at Spar. Gaymer's own-label production could be turned over to making Magners, he suggested.
"Magners will be made in the UK," said another senior industry source.
C&C had historically suffered problems meeting off-trade demand for Magners, admitted COO Stephen Glancey, with latest figures showing a 7.8% fall in off-trade sales to £65.1m [Nielsen 52w/e 3 October 2009]. He said he expected the Gaymer deal to improve relationships with UK retailers through its longer history with the off-trade.
With a move to Shepton Mallet production, C&C would also be able to offset the weakness of sterling against the euro as well as export costs. Howarth explained: "C&C has to ship packaged Magners across the water to the UK, which is very expensive."
C&C also acquired a 300,000 sq ft warehouse in Avonmouth as part of the Gaymer deal, which will give C&C the UK infrastructure to "get them out of a third-party distribution deal", said a source.
The boss of a rival cider brand added: "C&C will want to move production from Ireland to Gaymer's plant in England to improve the effects of currency."
The deal would allow C&C to put Gaymers Cider on heavy promotion and protect the "premium appeal" of Magners.
"Gaymers has virtually been given away in the off-trade something C&C will emulate. It hasn't been able to heavily promote Magners as it sees it as a premium brand," the rival claimed. "It can now argue for bigger shelf space and drive greater deals with retailers."
No comments yet