CIDER giant Bulmers has started its new financial year by announcing a healthy balance sheet and confirming 116 job losses.

While the company continues to buck the downward trend of the alcoholic drinks market with turnover up 57 per cent and operating profits up 16 per cent they are shedding about 10 per cent of their Hereford-based workforce in a restructuring drive.

Thirty-eight staff have accepted voluntary redundancy with a further 78 workers suffering forced redundancies. The people involved have already been informed.

As revealed in The Hereford Times in May, the move comes in response to competition and a difficult trading environment.

Group chief executive Mike Hughes explained the background: "It is regrettable but an unavoidable move driven by the need for continuing investment in our brands in a highly competitive marketplace."

A statement from the company said that there would be a generous redundancy package and a professional recruitment and advice service to help those losing their jobs.

Rob Garner, the group human resources director, said about the downsizing: "We are not alone in having to deal with a tough trading environment, some of our major customers and competitors having undertaken similar exercises in the last year."

Overall the chief executive's report, released on the same day as the announcement of job loses, was quietly optimistic. It outlined a company producing a healthy overall result in difficult circumstances.

In a beer and cider market that declined by two per cent last year, sales of Bulmers brands increased by three per cent.

"We have continued to invest behind our key brands, driving them to record levels. This has contributed to slower profit growth in the short term, but is building a stronger platform to secure the future," said Mike Hughes.

Confidence in the company was reflected by a dividend increase of five per cent per ordinary share.


Various factors were cited as the reason for the downturn in the market. Poor summer weather followed by floods, fuel crisis, train chaos and foot and mouth. This was compounded by restructuring in the 'on trade' market (pubs and hotels).

However, the company remains confident. In the longer term, industry restructuring could be of benefit to Bulmers.

"I believe this structural change provides real opportunities for a company such as ours, with strong brands and, following acquisitions of The Beer Seller, a direct route to retail outlets," Mr Hughes added.

The Strongbow brand continues to dominate the cider market in the UK. Targeted investment in sales and marketing - sponsorship of Leeds United and the Johnny Vaughan advertisement series - have resulted in a strong growth of nine per cent.

New ventures in the market include the launch of Sidekick, a flavoured schnapps drink. The product sold 15 million units in its first year and continues to grow.

The international market has been the most difficult. "Long alcoholic drinks markets worldwide had a difficult year, and consequently our international operations experienced mixed fortunes," said Mr Hughes.

In Australia, the company took over the Bass international beer brands and relaunched Strongbow. In America, they bought the American Hard Cider Company.

Both additions were part of a two-year acquisitions policy. This will now change to a policy of consolidation with the development of these markets.

The net result is that the future is looking positive for Bulmers. A situation it puts down to investment in its three 'strategy drivers' - the brands, the facilities and the people.

Brands such as Strongbow received record levels of investment over the year. Facilities received funding of £27m last year and with regard to its people Bulmers was placed second in the Top 50 Employers survey for the UK manufacturing sector.

In conclusion, Mr Hughes said "While some degree of market turbulence is inevitable, I believe we have the brands and people to continue to grow in the years ahead."

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