Ale dip sees brewer go for cider

London PrideAle stalwart Fuller, Smith and Turner is moving into the cider and lager market as sales of its traditional British beers drain away.

The London Pride brewer saw volumes drop by 1% though profits and revenues rose across the group thanks to a strong performance from its managed pubs and hotels, boosted by the Olympics.

It blames years of rises in duty for a decline in the industry. Chairman Michael Turner welcomed the abolition of the beer duty escalator but called on Chancellor George Osborne to go further and cut back the tax.

Fuller's is also taking action to broaden its brewery division, announcing that it had completed the £3.8 million purchase of premium cider firm Cornish Orchards, maker of Cornish Gold. In addition, it has ventured into the craft lager market with the launch of Frontier, which it says is brewed over 42 days "for a more memorable flavour".
The new stategy also includes a "Made of London" advertising campaign telling the story of London Pride's history and relationship with the capital and an "elegant" bottle redesign.

Meanwhile, the group, which has around 400 pubs mainly in London and the South East, has signed an agreement to open "London's Pride" next year, the only airside pub in Heathrow's new Terminal Two.

Adjusted profits before tax at Fuller's was up 5% in the year to March 30 to £31.7 million while revenues rose 7% to £271.5 million. Managed pubs and hotels saw a 9% total sales rise after the company bought premises in a targeted programme aimed at prime locations in market towns, transport hubs and key London locations.

The division saw like-for-like sales rise 2.1%. Accommodation was up 8.2%, which saw a one-off boost from the Olympics. But drinks sales within this part of the company saw a sluggish rise of just 0.9%, blamed on the wet summer and bitterly cold March. Food was up 3.9%.

The Fuller's Beer Company saw total beer volumes flat, with own beer production down by 1% and foreign beer up 3%. Revenues across the division were up 4% to £113.6 million.

Mr Turner said: "We welcome the recent abolition of the duty escalator on beer. However, successive duty rises above the rate of inflation over many years have taken a lasting toll on our industry. Beer volumes nationally are in decline under the burden of duty and we hope the Chancellor will give further beer duty reductions to help the British brewers."