Merrydown slashes non-core brands

Sales of Merrydown cider are preparing for take-off in the on-trade after the company jumped back into the black.

It has slashed more than 160 non-core product lines as part of a major restructuring and cost-cutting drive.

Under the new management team, this turned last year's annual losses of £1.04m into an operating profit of £490,000.

This was helped by a partnership with Kent brewer Shepherd Neame, which is working to boost sales in the UK on-trade.

Chief executive Nigel Freer said Merrydown planned major acquisitions or mergers in the future.

"The infrastructure is now capable of supporting a much larger business," he said.

The company now focuses on two core brands, soft drink Shloer and Merrydown, which was relaunched in April.

It is developing new products specifically for the on-trade — its first is a draught Merrydown launched this week.

Freer said these would be tested in Shepherd Neame pubs this summer.

"Merrydown is now expected to achieve growth as a result of improved packaging and imagery, advertising and promotional support, increased distribution and extensions to lines," Freer said.

Shloer, mainly aimed at the off-trade, is set to be targeted at pubs, again tested this year through Shepherd Neame.

The company now produces less than 40 lines, having put minor products, such as fruit drinks Sorelle and Piermont, on hold.

It now has almost no involvement with the alcopop Two Dogs, which contributed to the company's troubles.

Having been handed to SHS Group this year, Two Dogs is produced only occasionally by Merrydown for Europe.

The product clear-out led to a slump in the group's turnover for the year to March 31 from £23m to £16.76m.