Brewery group Adnams yesterday reported a 64 per cent slide in annual profits as it warned 2009 would be “as bad or worse” as last year for the beleaguered pub industry.
The Suffolk-based firm said faltering consumer confidence was hitting demand, with pressure from supermarkets, higher running costs and a bigger Government tax burden adding to the squeeze.
Adnams said operating profits last year slid from £4.2?million to £1.5?million, with revenues edging one per cent lower to £47.1?million.
“From today’s perspective it is hard to see much light at the end of the global economic tunnel and we have to anticipate a tough 2009,” executive chairman Jonathan Adnams said.
Adnams, whose wine business was also hit by the weakening of sterling against the euro, said it was taking action to weather the storm such as freezing beer prices for its pubs.
The brewer is feeling the chill of a weaker beer market as overall UK on-trade sales fell 9.3 per cent last year. But it sees more signs of life in the off-trade, as factors such as the smoking ban encourage more people to drink at home.
Adnams said off-trade wine sales rose by about four per cent last year and the firm sees “further growth potential” when the economy begins to recover.
The brewer has continued to invest and bolster its newly-launched Cellar & Kitchen wine stores, although this has “impacted the short-term profitability of the business”.