Cider is proving far from rosy for C&C Group, the owner of Magners Irish Cider, which announced yesterday that its chief executive had fallen on his sword after the latest in a series of profit warnings over two years.

The resignation of Maurice Pratt, who had been credited with rejuvenating cider sales in Britain by marketing Magners as an over-ice drink, came as C&C predicted a “material drop” in second-half profits after a sharp fall in market share.

Mr Pratt, who led C&C's flotation in May 2004, said that he had decided to step down after the “repositioning strategy” that he had sought to implement over the past two years had failed to deliver the promised results.

Soaring sales during the hot summer of 2006 saw Magners grab second place in the British cider market, behind Bulmers, owned by Scottish & Newcastle (S&N). However, sales have since gone into reverse amid dire weather, a consumer downturn and competition from S&N's relaunched Bulmers Original cider.

C&C's travails over the past two rain-sodden summers have been well documented, but more worrying is the admission that the latest period of poor performance could not be wholly attributed to the weather and the economy.

The group said that a special sub-committee of the board had been set up to review its strategy in Britain to address the fall in its share of the bottled cider market. Its market share fell from 69 per cent to 52 per cent in pubs and clubs, and from 8.3 per cent to 7.5 per cent in the off-trade.

Analysts said that the group's pricing strategy to the pub trade had won it few friends. One said: “When Bulmers started offering a better margin, a lot of pubs were quick to replace Magners. It needs to offer more volume-related incentives.”

C&C has also been accused of being slower than its rival at innovation. While S&N swiftly followed Bulmers Original with other over-ice products, such as Bulmers Pear Cider, Strongbow Gold, Jacques and Strongbow Sirrus, pitched at different consumer audiences, C&C has introduced little other than Magners Light.

In May, it launched a draught version, although it has been hampered by equipment supply problems. One analyst said that draught Magners may even be cannibalising sales of its core bottled cider, and added: “It's 50p-a-pint cheaper, so it was bound to happen.”

The brand's television advertising, by Young Euro RSCG, has also come under scrutiny. Although footage of cider being poured over pint glasses full of ice worked well in the hot weather of 2006, teaching the uninitiated how to serve Magners, finding the right marketing approach when it is pouring with rain has proved tricky. Even its sponsorship of London Wasps rugby club has turned rather sour. Last year's Heineken Cup champions have made one of their worst starts to the Guinness Premiership for years, and this week's training ground contretemps between its star players Danny Cipriani and Josh Lewsey has done little for its image.

Opinion is divided on whether Mr Pratt, who will stay on till a successor is appointed, has done the honourable thing or walked before he was pushed.

The 12 per cent fall in cider volumes in the six months to August 31 was mitigated by cost reductions and an 11 per cent rise in volumes from Tullamore Dew, C&C's Irish whiskey brand, limiting the profit decline to 0.7 per cent, at €66.5 million (£52.8 million).

However, what put paid to Mr Pratt's tenure was the warning that if current trends in the Irish and British markets continued, it would mean a “material drop in operating profit in the second half” and the annual dividend being cut from €0.27 to €0.12.

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