Link to BBC Homepage

Front Page

UK

World

Business

Sci/Tech

Sport

Despatches

World News in Audio


On Air

Cantonese

Talking Point

Feedback

Low Graphics

Help

Site Map

Friday, May 22, 1998 Published at 16:00 GMT 17:00 UK



Business

Merrydown not so merry
image: [ Merrydown hopes its new strategy will help raise a glass to new profits ]
Merrydown hopes its new strategy will help raise a glass to new profits

Merrydown the cider maker is to make substantial job cuts following a slump in the popularity of alcopops.

The Sussex-based company, formed in 1947 as a family-run cider and wine producer and floated in the mid-80s, plans to focus on its cider brand Merrydown and on soft drink Shloer.

The reorganisation will see it withdraw from all but one of its bottling activities and it will cut about 50 jobs mainly in production from its 125-strong workforce.

Strategic mistake

Chief executive designate Nigel Freer said: "Two-dogs (alcopop) was an initiative taken on about three years ago to save the business.

"In in fact it brought it to its knees because attention was taken away from Merrydown and Shloer which are the cornerstones of the business."

Merrydown was the first company to import Alcopops, fruit-flavoured alcoholic drinks, into the British drinking scene in 1995.

The products soon captured the interest of the profitable, young drinking market, but Merrydown was forced to hand over distribution to brewer Scottish and Newcastle, because it could not cope with growing demand and increasing competition.

Merrydown still manufactures the product, but early last year sold marketing and sales rights to Scottish Courage for the product in Britain, and to Pernod-Ricard in Europe.

Fall in demand

Demand for alcopops has now dropped off sharply amid complaints that they encourage under-age drinking.

The trend helped send Merrydown crashing to a pre-tax loss before exceptional charges of 516,000 ($840,000) for the nine months to December 31, 1997.

Merrydown's nine month results included an exceptional cost of 3.27m related to the review of the group.

As part of the makeover, the group also announced a board reshuffle and said it planned to raise about 7m through the issue of 15.6m new ordinary shares at 45p per share.








Back to top | BBC News Home | BBC Homepage


Link to BBC Homepage

In this section

Microsoft trial mediator welcomed

Vodafone takeover battle heats up

EU fraud: a billion dollar bill

NatWest bid timetable frozen

No longer Liffe as we know it

France faces EU action over electricity

Inquiry into energy provider loyalty

The growing threat of internet fraud

Christmas turkey strike vote

Brown considers IMF job

Train robbery game hope for SCi

From Sport
League to rule on Sky shares

Mannesmann fights back

Online share dealing triples

Chinese imports boost US trade gap

Pace enters US cable heartland

The rapid rise of Vodafone

Storehouse splits up Mothercare and Bhs

Brown's bulging war-chest

The hidden shopping bills

Europe's top net stock

House passes US budget

Rate fears as sales soar

Safeway faces cash demand probe

Mitchell intervenes to help shipyard

Maxwell pledge to pensioners

Power cuts spark union warning

New factory creates 500 jobs

Drugs company announces 300 jobs

Oil reaches nine-year high

'Asian management culture must change'

US 'prepared for Millennium Bug'

Gucci on a spending spree





Business Contents

Your Money
Market Data
Economy
Companies
Business Basics
E-Commerce