Client Newswrap: Supermarkets hit by massive tobacco-pricing fines and ice-cream brand plans to 'hijack' election meetings

David Elliott, packagingnews.co.uk, 19 April 2010

 

Welcome to this week's Client Newswrap, bringing you the latest from the world of retailers and brands.

 

Brands

Confectioner Mars has recruited former Liverpool and England footballer John Barnes to star in a new advert in which he will re-enact his famous rap from the England team's 1990 World Cup song World in Motion, performed with pop band New Order. The ad, which will air in May as Mars bids to cash in on the building excitement around this year's World Cup, will appear on TV and on the company's website.

 

Luxury ice-cream brand Antonio Federici is to make the most of the warmer weather and the run-up to the UK's general election with a series of spoof online adverts and outdoor publicity stunts featuring a lookalike of Italian prime minister Silvio Berlusconi as the head of its fictional Gelato Party. According to The Grocer, the brand will send its ‘Berlusconi' with bikini-clad ‘candidates' in tow to "hijack" election meetings and media events and promote the brand's message, ‘Change Your Ice Cream, Join the Gelato Party".

 

Bread brand Kingsmill has launched an on-pack promotion to tie in with the latest run of ITV series Britain's Got Talent. The promo, created by marketing agency Billington Cartmell, features on 65 million Kingsmill packs and incorporates an adaptation of the Britain's Got Talent logo alongside the bread's well-known yellow, white and blue branding.

 

Soft drink brand owner AG Barr is pumping £15m into promoting its Irn-Bru line in the south of England, in a bid to dramatically boost sales in the region. The investment represents the brand's biggest-ever single spend on Irn-Bru, which currently makes two thirds of its revenue in Scotland. AG Barr last month posted an overall sales growth of 18.7% to £201.4m.

 

Export volumes of Scotch whisky hit record levels last year after a boom in demand for the drink from the US and Latin America. Exports of malt and blended whiskies grew by 4% in 2009, according to the Scotch Whisky Association, and sales rose by 3% to £3.13bn. While the US was the biggest importer, spending £419m, UK sales fell by 1% to £1.26bn.

 

Retailers

Morrisons and Asda are among supermarkets hit by £225m of fines handed out to tobacco giants Imperial Tobacco and Gallaher and nine retailers for "unlawful practices" in price-setting. Morrisons received an £8.6m fine, as well as a £10.9m penalty for Safeway; The Co-operative Group was fined £14.2m and was also responsible for a £4m fine for Somerfield; and Asda was slapped with a £14.1m penalty. Imperial was hit with a £112.3m fine while Gallaher had to pay £50.4m. Combined the fines are the biggest ever handed out by the watchdog, and relate to infringements that took place between 2001 and 2003.

 

Tesco is expected to announce a solid profit increase tomorrow. Analysts expect the supermarket to report pre-tax profit of around £3.4bn for the year to the end of February, up 9% on last year, while total sales are expected to hit the region of £59bn.

 

Retailers in Central London have reported like-for-like sales rose 9.9% in March, more than double the rate of the rest of the UK, according to the British Retail Consortium. The rise was attributed to an earlier Easter, which fell in March this year, and the weak pound attracting tourists to the capital. For the country as a whole, sales grew 4.4% in March.

 

Food and drink retailing magazine The Grocer has tipped Dave Cheesewright to take the helm at Asda after current chief executive Andy Bond's shock decision to step down last week. According to the magazine, Cheesewright was identified by the supermarket's owner, Wal-Mart, as an eventual successor a number of years ago, and it has been suggested he may have taken the job as president and CEO of Wal-Mart Canada in 2008 as a "stepping stone" to the Asda top job.

 

Meanwhile, Asda has confirmed plans to become the UK's biggest non-food retailer, by boosting the number of its Asda Living stores five times to 150 over the next five years. Departing chief executive Andy Bond said: "Over the next five years, we have two clear aspirations - to be the market leader in general merchandise and the clear No 2 for food."