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Winnipeg Free Press - PRINT EDITION
Molson Coors loses share after price increase
MONTREAL -- Molson Coors Brewing Co. lost market share in Western Canada in the first quarter after its rivals refused to match price increases for value brands.
"Some of the quarter has been satisfactory but not spectacular," chief executive Peter Swinburn said in an interview Tuesday after the company reported first-quarter results.
The Denver- and Montreal-based company beat expectations as its core underlying earnings increased 4.5 per cent in the first quarter on growth in its U.S. operations that offset weaknesses in Canada and Britain.
Molson Coors, which reports in U.S. dollars, earned US$79.4 million or 44 cents per share, a 3.9 per cent decline on $6.1 million of costs related to its StarBev acquisition in Eastern and Central Europe. That compared to $82.6 million or 44 cents per share in the prior-year period.
Swinburn said they were trying to close the price gap between value and mainstream brands. While refusing to admit it was a mistake, he said increases will be rolled back later this month.
Molson Coors market share declined about half a share point from a year ago on estimated industry growth of 1.3 per cent. Non-core brands account for about 10 per cent of the total business but generate strong profits because they need less marketing support.
The performance of its strategic brands offset the declines in value brands everywhere except the West.
Molson Coors said it may export its Canadian-formulated iced-tea flavoured beer to the U.S. if it's a hit in summer testing in Canada.
MillerCoors chief executive Tom Long said it is watching the rollout of Coors Light Iced T very closely.
-- The Canadian Press
Republished from the Winnipeg Free Press print edition May 9, 2012 B7
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