NI drinks firms see profits fall as costs soar
Two of Northern Ireland’s biggest drinks companies have seen their profits fall as costs rise.
Operating costs at Diageo Northern Ireland jumped to £73m (up 25%0 while Tennent’s NI saw costs rise by 18% to £48.2m.
According to accounts filed at Companies House for Belfast-based Diageo Northern Ireland, for the year ending June 2023, pre-tax profits dropped by 65% to £2.4m.
A year earlier, the company had reported a surge of over 50% in pre-tax profits, but rising costs have reversed its fortunes, despite turnover increasing by 6% to £180m.
Beer sales for the company, which boasts a portfolio including brands such as Guinness, Harp and Smithwick’s, were strong in the year to June 2023, rising from £114.5m to £122.5m.
Last year it was announced that a pint of Guinness could go up by as much as 40p after the firm announced price increases for customers.
Diageo NI, which also has Baileys in its portfolio, saw spirits sales grow from £54.7m to £57.5m during the year. Employee numbers were up from 119 to 131 during the year, but wage costs were down from £7m to £6.6m.
Diageo NI’s employees are based across its three sites in the province — a beer packaging plant in east Belfast, its corporate headquarters in Belfast city centre and the Baileys global supply facility in Mallusk.
Last year it was also announced that Diageo had won planning permission for a £26m extension of its Baileys site.
The company said the approval would improve its logistics and warehousing facilities on the site, which produces over 60 million bottles of Baileys a year for export to 150 countries.
Diageo NI also revealed it would pump £24.5m into the regeneration of its east Belfast packaging facility.
The firm, which is overseen by Diageo Ireland managing director Barry O’Sullivan, declared a dividend of £6.5m during the year.
But directors’ remuneration, including pension contributions took a hit, dropping from £455,000 to £212,000.
Meanwhile, the salary of the highest paid director was also down from £310,000 to £126,000.
Tennent’s NI, which is behind the manufacturing and distribution of Tennent’s, Heverlee, Clonmel and Magners Irish Cider, was also affected by rising costs.
Despite turnover increasing by 16% to £61.5m during the year ending February 2023, the company saw pre-tax profits dip by 38% to £3.2m.
According to the accounts, which have just been published at Companies House, operating costs rose by 18% to £48.2m during the year.
But the business saw turnover from sales of beer and cider increase from £52.6m to £61.5m.
