Cobra beer announced its first ever annual profit on Monday and said it will nearly double marketing spend this year to grow sales.
The group posted pre-tax profits of ?4.9 million on sales of ?48 million last year, which comes after a deal in 2009 that left the group majority owned by Molson Coors.
Cobra underwent a ‘pre-pack administration’ in May 2009 in a controversial deal that saw Molson – which brews Carling, Grolsch and Worthington’s – acquire a 50.1% stake in the business for a reported ?14 million, while unsecured creditors lost ?75 million.
The business, which was founded by Lord Karan Bilimoria, moved production of the beer from Bangalore to Molson Coors’ factory in Burton last May as part of cost cutting measures following the deal.
Cobra has also been benefiting from Molson’s marketing expertise and buying power, according to the group.
It spent ?3 million last year on a marketing campaign and said it will boost this to around ?5 million this year.
Adrian Davey, managing director of the Cobra Beer Partnership, said the move would help grow the brand. He said: “2011 marks a new chapter and we are very excited as Cobra moves on to the next stage of its brand evolution. Up to this point, the Cobra Beer Partnership has been about stability and ensuring the long-term health of both the brand and the business.”
Cobra, which was first imported into the UK in 1990 by Lord Bilimoria, claims to be the perfect accompaniment to curry because it is less fizzy than most lagers. While the beer has proved popular, especially in curry houses, the business failed to make a bottom-line profit for nearly 20 years.
By 2008, it became clear that Cobra needed the help of a large brewer to succeed in the highly competitive beer market and the company unsuccessfully tried to find a buyer, including drinks giant Diageo. Cobra then attempted to secure a company voluntary arrangement (CVA) – an alternative to administration – to reduce its losses.
But this was blocked by some of the company’s creditors, including Bombardier-brewer Wells & Young’s, which brewed for the company under licence in the UK. Cobra went into a pre-pack administration that saw it bought immediately by Molson.