The dangers of following fashion in the drinks industry were laid bare today when C&C, the Irish cider maker, reported a 41.4 per cent fall in profits for its last financial year.

Sales of its premium Magners brand shot up by an astonishing 350 per cent in 2005 and 225 per cent during 2006 as long hot summers beckoned people into pub gardens and a marketing campaign pitched it poured over ice as the perfect summer drink.

It helped to launch cider as a premium drink rather than a park bench tipple as celebrities including Lily Allen and the Arctic Monkeys were snapped drinking it.

C&C began a €200 million expansion of its cider production facilities in Clonmel, Co Tipperary, as part of the group's largest-ever capital investment programme, with plans to hire 150 extra workers.

Chief executive Maurice Pratt announced plans to go into Spain and Germany.

But last year profits dropped by 10 per cent from €176.9 million to €103.9 million and so far this year the group has been hit by low consumer confidence and poor spring weather.

Revenues fell by 8.1 per cent to €679 million (£537 million) as Magners' volumes dropped 15 per cent. Volumes at Bulmers, the Irish cider brand, dropped 4 per cent.

After two profit warnings last year, this latest set of results will do little to calm the perennial takeover speculation around the company, which was hit by the introduction of Scottish & Newcastle’s Bulmers in the UK last summer. Scottish & Newcastle owns the rights to the Bulmers brand in the UK.

C & C now intends to cut costs by €10 million a year.

Mr Pratt, a well known figure in Irish business circles, said that he expected the company’s performance to stabilise in 2008/09 following a cost-cutting programme and a series of marketing initiatives.

The company said: “On the basis of normal summer weather, the group expects the premium cider category in Great Britain to return to growth in 2008.”

C&C will launch a draft version of Magners in the UK later this month, in time for the summer market.

Barry Gallagher, an analyst at stockbrokers Davy, said he expected 3 per cent volume growth for cider this year, though weather and heightened competition remained key factors.

He said: “With rationalisation effected, new key executive appointments made in Britain, draught Magners set to launch and further investment in trade marketing intended, Magners’ growth momentum in Britain may be reignited.”

C&C's share price fell by 3 per cent in early trading this morning.

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