Drink firm C&C Group reported growth in its businesses in Scotland and Ireland but total first half sales volumes were down by more than 10%.
C&C said its Tennent’s lager brand in Scotland posted a “solid” performance, with revenue in line with the previous year, as operating profits in the country rose 14.3% to £17.7million.
The Irish group was also boosted by its recent acquisition of the 50% of Scottish firm Wallaces Express it did not already own.
The deal gave Dublin-based C&C full control over Scotland’s largest independent wines and spirits wholesaler, employing about 300 people at operations in Irvine, Coatbridge, Dumfries, Lanark, Kintore and Inverness.
Announcing results for the six months to August 31, C&C said the contribution from Wallaces was “robust and in line with internal expectations”.
But sales of the group’s Magners cider fell by 17% in value after it lost market share and felt the impact of retail price wars.
Magners’ volumes were down by 10.3% and C&C warned the market was likely to remain volatile for the medium term.
Rivals have weakened the brand’s position in the pub and club sector, while over-supply in shops and off-licences is also having an impact on pricing.
The company said: “Mainstream grocers are under huge pressure as they strive to compete with discounters, leading to price deflation and rationalisation.”
C&C also makes Irish cider brand Bulmers, Gaymers cider and the Shepton Mallet Cider Mill range of English ciders.
It does not currently own any pubs, which is why it has been looking at acquiring bar operator Spirit as a possible new platform for its products.
C&C, which is run by a number of former executives of brewer Scottish and Newcastle, last week tabled an approach but has so far been unsuccessful in gatecrashing Spirit’s talks with Greene King over a £750million takeover.
Group profits for were down by 2.6% to £50.7million, with gains in England and Wales falling by 36.8% to £5.7million after a fall in operating margins of nearly four percentage points.
Chief executive Stephen Glancey said: “The overall UK cider market remains challenging.”