The Irish drinks company behind Magners cider became the latest victim of the consumer downturn after revealing that sales had fallen dramatically in recent weeks.

C&C Group, which has suffered a torrid time since last year's dire summer, blamed poor weather and the economic downturn as it gave warning that revenues for the first half of its financial year would fall below the levels achieved a year ago.

Sales in its cider division in the four months to June 30 were down 10 per cent despite a “broadly satisfactory” performance from March to May and a 3 per cent increase in its spirits and liqueurs division.

It warned investors that revenues in June, the first key selling month of the year, had been hit by “continuing unsettled weather and a deteriorating economic backdrop”, leaving the outlook uncertain.

Shares in the group, whose advertising has positioned Magners as an integral part of the British summer, fell more than 11 per cent to €2.44. The shares have plunged since the spring on fears of a sales slowdown. The stock dropped 9 per cent on Thursday, the biggest one-day fall in nine months.

The slowdown will prompt yet more fears that customers are cutting back on spending. Analysts suggested that the premium nature of the Magners offering - a bottle costs nearly £4 in pubs - could be putting off drinkers.

C&C insisted that operating margins should improve over the coming weeks and that the higher margins would, at least, offset the impact of the falling revenue.

Industry experts last month claimed that Magners was continuing to lose market share in both the on and off-trade. ACNielsen, the market research group, said that sales of the brand in British pubs slumped by almost a third in March compared with the same month in 2007. Analysts saw the June-to-September quarter as crucial to Magners' recovery.

As well as poor weather, the group has come under increasing competition from rivals such as Bulmers. Scottish & Newcastle, now part of Heineken, relaunched the Bulmers Original as an over-ice cider two years ago after seeing Magners transform what had been a flagging market.

HP Bulmer, which was acquired by S&N five years ago, sold the Bulmers rights for Ireland to William Magner in 1935 and its cider is still sold under the Bulmers brand in the Republic.

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