Britain's biggest brewer and cidermaker, Scottish and Newcastle (S&N), is launching a premium cider brand, Strongbow Sirrus, to tap into heady growth in the segment and counter the success of Irish brand Magners.

S&N controls two-thirds of the UK cider market after its purchase of Bulmers in July 2003, and is now turning to the high-priced premium end after the success over the last two years of Irish group C&C with Magners.

C&C reported a 61 per cent increase last year in sales volumes of Magners, which is exported to Europe and the US. The group said the brand had performed particularly well in Northern Ireland and Scotland.

The group launched the brand in the greater London area in March with a major marketing campaign and hopes to break even in the south-east in the second half of next year.

The £1 billion (€1.48 billion) UK cider market is one tenth the size of the beer market but is growing at 6 per cent a year compared with a flat beer market, while the premium end, although small, shows explosive growth of 30 per cent a year.

"Cider is growing stronger than beer because it is attracting more females and also younger drinkers, and gaining growth from ready-to-drink products," S&N's UK managing director John Dunsmore said yesterday.

He pointed out that cider is eating into sales of packaged lager and the ready-to-drink products market, where the leading brands are Bacardi Breezer and Diageo's Smirnoff Ice.

S&N is launching its new bottled cider across the UK in July and August to be sold in pubs and supermarkets, with a half-litre bottle being priced in line with Magners and at a 20 per cent premium to standard cider brand Strongbow.

The group will spend £5 million of its £22 million pound cider marketing budget on the new cider in 2005, while Mr Dunsmore estimates that Magners is spending a similar amount behind its brand in London and Scotland. - (Reuters)