Weak economy slowing thirst for beer in some provinces: Molson Coors

MONTREAL -- Molson Coors Brewing Co. says a sluggish economy and higher food prices are affecting beer drinking in Canada's oil-rich provinces.

See Full Article

Beer drinkers, particularly in Alberta, are shifting from higher-priced premium brews to economy brands, the company said Thursday.

Overall sales volumes have also been slipping in Alberta, as well as in the oil-producing provinces of Newfoundland and Labrador and Saskatchewan.

Molson said its sales volume decreased 5.4 per cent across Canada in the fourth quarter. In January, sales to retailers for at-home consumption fell by more than 10 per cent.

Part of that decrease can be attributed to higher food prices and household debt, said Stewart Glendinning, chief executive of Molson Coors Canada.

"The consumer is under pressure," he said during a conference call on the company's fourth-quarter and 2015 results. "And if you add to that the fact that consumer debt in Canada is at an all-time high, it's made for quite a difficult recipe in some of those provinces."

Molson Coors (TSX:TPX.B, NYSE:TAP) said its Canadian market share dropped by one percentage point in the fourth quarter, primarily due to the performance of its flagship Coors Light brand.

Sales volumes were reduced in Quebec by the brewer's decision to raise prices to match competitor Budweiser. Coors Light was also hurt from consumer purchases of Coors Banquet.

Glendinning said the company has made strategic changes over the past three years, including overhauling its supply chain, reducing costs and transforming its portfolio, that will pave the way to improved results.

The brewer is modernizing its manufacturing capacity by building a new plant in Vancouver and is close to completing an assessment of its 230-year-old Montreal facility. Glendinning wouldn't say when a decision will be announced on whether to upgrade or move.

And even though hockey goes hand-in-hand with beer drinking, the executive said he's not overly fazed by the prospect that no Canadian hockey team will make the NHL playoffs if current standings hold.

"Whilst we would love to have the Canadian teams going all the way to the Stanley Cup finals ... our business is not dependent solely on that," he said.

Molson Coors said its net income plummeted 65 per cent to US$32.8 million in the fourth quarter because of lower sales, currency fluctuations and reduced income from operations in Canada and the United States.

The company, which reports in U.S. dollars, said its profit excluding one-time items fell 11.3 per cent to $90.6 million as net sales decreased to $844.4 million.

In Canada, adjusted pre-tax profits from continuing operations fell 32 per cent to $51.8 million on $341.9 million in net sales.

For the full year, net profits decreased 30 per cent to US$359.5 million on a 14 per cent dip in revenues to $3.57 billion.



Advertisements

Latest Economic News

  • What's driving the softwood lumber dispute?

    Economic CTV News
    The U.S. federal government announced Monday that it’s imposing “countervailing duties” on Canadian softwood lumber of up to 24.12 per cent. Observers warn that could mean thousands of jobs lost in Canada’s forestry sector, because our exports will suddenly become that much more expensive for Americans to buy. Source
  • U.S. imposes preliminary duties up to 24% on 'subsidized' Canadian softwood lumber

    Economic CBC News
    Canada's forest industry felt the slap of the countervailing duties they were bracing for late Monday, with confirmation out of Washington that a U.S. Commerce Department investigation has once again concluded that softwood lumber imports are unfairly subsidized. Source
  • Barrick Gold sees profits rise in quarter but misses analyst expectations

    Economic CBC News
    Barrick Gold's first quarter results fell short of expectations despite swinging to a profit of $679 million US compared to a net loss of $83 million US in the same quarter last year. The gold mining giant said that once adjusted, net earnings came in at $162 million US or $0.14 per share, compared with $127 million US or $0.11 per share in the first quarter of 2016. Source
  • CN raises 2017 outlook on record Q1 volumes, helped by higher grain

    Economic CBC News
    Canadian National Railway raised its outlook for the year after profits increased 12 per cent on record first-quarter volumes, helped by an increase in Western Canadian grain. The Montreal-based railway said Monday it expects to earn between $4.95 and $5.10 per adjusted diluted share for the year, an increase of eight to 11 per cent from last year. Source
  • Redwater Energy decision that gives creditors priority over environment upheld by Appeal Court

    Economic CBC News
    Decision could affect handling of abandoned wells across Alberta By Tracy Johnson, CBC NewsPosted: Apr 24, 2017 2:11 PM MTLast Updated: Apr 24, 2017 2:11 PM MT Source
  • Creditors over environment: Alberta Court of Appeal upholds Redwater Energy decision

    Economic CBC News
    Decision could affect handling of abandoned wells across Alberta By Tracy Johnson, CBC NewsPosted: Apr 24, 2017 2:11 PM MTLast Updated: Apr 24, 2017 2:11 PM MT Source
  • Law society urged to adopt $25K cap on referral fees in Ontario

    Economic CTV News
    TORONTO -- Lawyers in Ontario should have their fees for referring clients to another lawyer capped at a maximum of $25,000, a report released on Monday recommends. In addition, the report says lawyers should have to record referral fees paid or received in their books, and report on their referral-fee practices in their annual reports to the body that regulates the profession in the province. Source
  • Car rental companies agree to pay $1.25M penalty for advertising impossible discounts

    Economic CBC News
    Two of Canada's largest car rental companies have agreed to pay $1.25 million in penalties for falsely advertising discount prices that are essentially impossible to obtain. Canada's Competition Bureau has reached what it calls a "consent agreement" with Hertz and Dollar Thrifty whereby both companies will pay penalties totalling $1.25 million and "ensure their advertising complies with the law and implement new procedures aimed at preventing advertising issues in the future. Source
  • Guide to 'fake news' wins $30,000 National Business Book Award

    Economic CTV News
    TORONTO -- A timely guide to distinguishing fact from fiction in the era of "fake news" was announced Monday as the winner of the $30,000 National Business Book Award. Neuroscientist Daniel J. Levitin said he was prompted to write "A Field Guide to Lies: Critical Thinking in the Information Age" (Allen Lane Canada) as a response to the "Balkanization of the news over the last 15 years. Source
  • Montreal couple hid winning $55M lottery ticket in daughter's toy box

    Economic CTV News
    MONTREAL -- A Montreal couple who won $55 million in a lottery jackpot hid the winning ticket in their daughter's toy box over the weekend. Nathalie Langlais and Gilles Rosnen picked up their winnings at Loto-Quebec headquarters in Montreal on Monday, three days after the Lotto Max draw. Source