The wet weather dominating the British summer has claimed its first corporate victim, with Scottish & Newcastle giving warning today that it has been hit by a slump in beer sales.

The group, Britain’s biggest brewer, said that profits in its UK business for the first six months to the end of June would not match the level achieved in the same period a year ago.

Despite predicting a revival in the second half, the warning will send a tremor through the leisure sector, which is already bracing itself for a sales downturn given the smoking ban that came into force at the weekend.

The brewing industry is also facing tough comparables with a year ago, when the World Cup fuelled a sales boom.

Scottish & Newcastle, home to Foster’s, Kronenbourg, John Smith’s and San Miguel, said that the beer market across the UK as a whole declined by 5 per cent in the first half.

While insisting that its leading brands had weathered the storm better than most of its rivals, the group acknowledged that its half-year operating profits in the UK would be less than expected in the City.

The group is putting extra investment behind its cider brands, Strongbow and Bulmers, and pressing on with a £10 million cost-cutting plan to boost margins.

It asserted that UK profits for the year as a whole should still meet targets as sales growth recovers in the run-up to Christmas.

The group added that it was experiencing strong sales growth in the US, India and Russia.

Sales of Kingfisher in India are up by at least 10 per cent on a year ago, while the group's Baltika brand in Russia has seen its market share grow by 2 per cent to 37.6 per cent.

In a trading statement today, S&N said: “While in some markets there are particular challenges, we remain confident that performance for the full year will meet expectations for the group as a whole.”

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