CORPORATE RESPONSIBILITY

C&C Chairman
HIGHLIGHTS
In the year ended 28 February 2013 the Group has:
  • reduced total usage of electricity by 3% and natural gas by 4.5%, preventing over 2,740 tonnes of carbon emissions
  • reduced CO2 usage at Shepton Mallet by 24% after the implementation of a new utility management system and specialist training
  • made 322 new direct shipments from Clonmel to GB Customers, saving 64,400 miles and 87 tonnes of CO2 equivalent
  • implemented local kegging arrangements and more efficient keg return processes saving over 936,000 miles travelled and 1,258 tonnes of CO2 equivalent
  • recovered and recycled over 2,100 tonnes of CO2 produced by the cider fermentation process in Clonmel and used it to carbonate our products
  • recycled or re-used 100% of waste produced at Clonmel
  • reduced the total number of accidents in manufacturing by 18% and days lost due to accidents by 48%
  • made £1 million available to apple growers in Great Britain for projects related to sustainability
  • now trained over 7,000 students at the Tennent’s Training Academy for the Scottish pub and hospitality industry
  • launched the Tennent’s modern apprenticeship programme which saw 25 apprentices receive high-quality training
  • taken over the chair of the National Association of Cider Makers

INTRODUCTION

The Group aims to meet the needs of its stakeholders in ways that are economically, environmentally and socially responsible. We operate a Group-wide corporate responsibility and sustainability policy. Sustainability not only reduces our costs but also reduces the impact that our business has on the environment.

ENVIRONMENTAL IMPACT & ENERGY

Our energy reduction teams in each of the Group’s manufacturing facilities seek to reduce our impact on the environment. Each team looks at ways of reducing consumption of energy and raw materials, waste going to landfill and emissions, and also looks at ways of increasing transport efficiency and packaging optimisation. Each team reports monthly to the Group Manufacturing Director, who reports through the Group Chief Executive Officer to the Board.

Compared with FY2012, we have reduced our electricity usage by over 3%, and we have reduced our natural gas usage by 4.5%. We are committed to further reducing our electricity and natural gas usage and we remain on track to achieve our energy reduction target of 11% by the end of FY2015, against FY2012 as a base year.

Annual targets are established across all manufacturing sites to monitor and direct energy usage, water consumption and effluent discharge, and awareness training ensures that all personnel are familiar with our environmental policy and our business’s environmental impact.

Our cider manufacturing facilities at Clonmel and Shepton Mallet continue to be accredited with the Environmental Management Standard ISO 14001; the facility at Clonmel also continues to be accredited to the Irish Energy Management Standard IS EN 16001:2009, and works closely with the Sustainable Energy Authority of Ireland (SEAI). These standards require us to demonstrate the systematic management of energy leading to a decline in greenhouse gas (GHG) emissions. Our facilities at Wellpark and Shepton Mallet continue to meet their regulatory targets, and operated within the European Union Emissions Trading Scheme up until the end of 2012 when they took advantage of the UK government’s small emitters opt out scheme (see further below). As members of the British Beer and Pub Association (BBPA), we participate in energy reduction initiatives, surveys and seminars.

The Group put a new energy management system into Shepton Mallet in June 2012 to measure and manage gas, electricity and water usage. This also resulted in a 24% reduction in CO2 usage in our manufacturing processes between December 2012 and February 2013.

A proposal for a new 800KW wind turbine on the Clonmel site is now at the planning stage and, if installed, is planned to provide 25% of Clonmel’s electricity usage, which will act as a hedge against future energy price rises and further reduce CO2 emissions.

Our cidery in Vermont switched to efficient lighting and water systems in the early 2000’s. In 2010 it invested in Vermont’s Cow Power programme, which turns manure into energy, and from which the cidery has received 25% of its power over the last three years. It is also in the process of constructing a 1.5 acre solar power facility which, when operational, is expected to provide an additional 10% to 15% of its power usage.

SUSTAINABLE LOGISTICS

FY2013 has seen a continuation of the focus on driving efficiencies in conjunction with our transport partners. We have sustained an average of 26 pallets per load on movements from Clonmel to our National Distribution Centre (NDC) in Bristol and have increased the average pallets per load from 22 to 22.4 on deliveries from Shepton Mallet and the NDC to customers within GB. In addition, we have engineered a number of key changes to our ways of working, which include:

  • 322 new direct shipments from Clonmel to GB Customers, saving 64,400 miles and 87 tonnes of CO2 equivalent over the year
  • Two new backhaul agreements with key strategic GB customers enabling them to better utilise their fleet and reduce overall road trips
  • Contract kegging agreements in Italy, USA, Australia and Canada, saving over 781,000 miles and 1,050 tonnes of CO2 equivalent over the year
  • New improved process for storing returning kegs from Australia and USA more efficiently (honeycombing) saving over 155,000 miles and 208 tonnes of CO2 equivalent over the year.

PACKAGING

We continue to look for ways to reduce the weight of our packaging. Measures taken this year to reduce the weight of our packaging include increasing the stretch of the pallet shrink wrapping, meaning fewer wraps per pallet and less material used across all manufacturing sites, which resulted in a 3% reduction in plastic used over the year, and down-gauging shrink wrap which saves 10% on the volume of plastic used. This was established in Clonmel in FY2013 and will be rolled out to Shepton Mallet and Wellpark in FY2014.

Between 60%-70% of the glass used in our bottles is recycled and this is increasing. Another project planned for FY2014 is a new non-returnable keg which will be recycled at its destination location and which eliminates international transportation of empty kegs back to the UK and ROI. This will significantly reduce the Group’s carbon footprint.

CARBON CONSUMPTION

The Group continuously monitors the impact of its operations on the climate and we look to reduce our emissions. We assess and manage climate change related risks and opportunities, including the impact on the availability and security of our sources of raw materials, such as aquifers, orchards and maltings.

The Group has participated in the Carbon Disclosure Project (CDP) Supply Chain Programme for a number of years, and CO2 emissions for the Group are evaluated annually and posted on the CDP website. Further information on the CDP, including a copy of the CDP Ireland Report 2012, is available at www.cdproject.net. In CDP Ireland Report 2012, the Irish CDP respondents’ average disclosure score was 78%, the Group scored 96% and was second in the consumer staples sector. Our incentive scheme provides financial rewards to all employees, based on successful achievement of a range of targets at both site and overall Group levels.

In the ROI and the UK, through our rural development commitment and by supporting orchard growers who manage over 2,000 hectares of orchards for apples used in the production of our cider, in FY2013 we offset 22,090 tonnes of CO2 equivalent and helped to preserve the biodiversity of these regions.

Our cidery in Vermont participates in the American Forests programmes, and has planted 7,311 trees this year and a total of 42,033 trees in the last four years to offset its carbon emissions.

Each year we ensure compliance to national packaging regulations for our products placed into the marketplace. In the UK the actual sale volume of packaging recycled in the calendar year 2012 saved over 1,450 tonnes of CO2 equivalent. In ROI we also recovered and recycled approximately 2,132 tonnes of CO2 produced by the cider fermentation process and used it to carbonate our products.

In 2012 the UK Government offered small carbon emitters the opportunity to “opt out” from the European Union Emissions Trading Scheme (EU ETS) from the beginning of 2013 to 2020 as part of the UK Government’s efforts to cut down on red tape. Small emitters account for 1% of the UK’s EU ETS emissions and this opt out scheme could save the industry up to £80 million in administrative costs from now until 2020. Our two manufacturing sites at Shepton Mallet and Wellpark along with around 250 other eligible facilities opted out of the EU ETS for this period and will have an industry sector-specific emission reduction target.

WASTE

We have systems in place to maximise the recycling of the waste that we produce and minimise what we send to landfill. Our ultimate goal is to recycle or recover for reuse 100% of our waste products. In FY2013, our manufacturing sites reduced the overall amount of waste sent to landfill by over 30%.

At Clonmel our recovery and recycling rate was 100%, and we sent no waste to landfill as all non-recycled waste was converted to RDF (refuse derived fuel).

At Shepton Mallet our recovery and recycling rate was 86% and the amount of waste sent to landfill dropped from 57 tonnes in FY2012 to 50 tonnes in FY2013, a 12% reduction. In addition a can wastage reduction project has brought can wastage down to 0.7% of all cans used, and specialist training completed on our cardboard case packers has further reduced packaging waste.

At Wellpark no waste is sent directly to landfill. The amount of waste sent by our third party waste management contractor to landfill dropped from 115 tonnes in FY2012 to 70 tonnes in FY2013, a 39% reduction. We also commenced a project with Zero Waste Scotland in January 2013 to identify waste reduction opportunities along our supply chain, and it will involve our suppliers and customers as partners in the project.

In Vermont there is a recycling programme for all industrial waste materials. More detailed data will be included for FY2014.

WATER

The Group’s manufacturing sites are not located in any region identified as prone to drought, and water scarcity is not considered to be a critical risk for our business. Nevertheless, water preservation and management is an important business consideration for the Group and we continue to monitor the usage of water per hectolitre of finished product from each manufacturing facility and across our supply chain.

This year the Group participated in the 2012 CDP Water Disclosure initiative. The results of the report are available on the CDP website.

In FY2013, our total water usage in UK and ROI was 17.08 million hectolitres, equivalent to 3.69 hectolitres of water used per hectolitre (hl/hl) of product produced, which is significantly better than the recognised global brewing benchmark of 4 hl/hl.

Our continuing aquifer protection programme in Clonmel has resulted in us retaining our successful accreditation to the Irish IS 432:2005 Spring Water standard. Across the Group, we continue with our projects on brewery condensate recovery, reclaiming pasteuriser and bottle rinse water, fruit processing, and minimising plant and process cleaning systems, and in FY2013 we recovered and reused over 270,000m3 of biogas from our anaerobic waste water treatment plant in Clonmel for use as fuel for our boilers.

PROCUREMENT

The implementation of our sustainable and ethical procurement policy is regularly monitored by the Board via the Group Manufacturing Director, and each business unit is required to demonstrate compliance with this policy by providing access to its audit and review records, its procedure manuals and its staff training materials for audit purposes.

Our central teams in procurement and technical services actively audit our suppliers’ track record in environmental management, health and safety, sustainability and corporate social responsibility.

We proactively audit and approve our existing supplier base after reviewing responses received back from a supplier approval questionnaire. This questionnaire specifically asks for details in the management of environmental, health and safety, sustainability and corporate social responsibility. Reviewing of supplier responses is a function of our central teams in procurement and technical services.

We seek to support our suppliers through entering into long term supply arrangements with our suppliers of apples and barley, our key raw materials.

GREEN PRODUCTION

In FY2013, we milled 41,000 tonnes of apples in our cider mills. We are also encouraging apple growers to plant early harvesting varieties to increase the availability of apples in the off season.

We encourage sustainable agricultural practices and the preservation of biodiversity. We are actively involved in the National Association of Cider Makers (NACM) which takes the lead in adopting and working to sustainable principles both in the physical and social environment, and carries out annual climate change assessments.

We have continued the Green Apple Awards, a biennial competition open to all contracted growers who supply apples to the cider mill at Shepton Mallet. Growers are encouraged to practise Integrated Pest Management, which involves the use of carefully timed sprays to minimise usage and the impact on beneficial insects. We continue to focus on local sourcing of apples and have fostered close partnerships with the local farming communities.

COMMUNITY ENGAGEMENT

The Group takes its responsibilities as a corporate citizen seriously. This includes respecting and complying with local tax laws and paying the required levels of tax in the different countries where we operate. We claim the allowances and deductions that we are properly entitled to, for instance on the investment and employment that we bring to our communities. We benefit from having always been established in Ireland’s low tax environment as our major cider production unit is located in Clonmel and the Group is headquartered in Dublin. The majority of the Group’s taxable profits are earned in Ireland and the UK, which both have competitive corporation tax rates compared with the European average. In Ireland and the UK we remit substantial amounts of duty on alcohol production.

Dialogue with customers

Understanding the views of our stakeholders is an important part of our business. We seek feedback from our customers and our divisional managing directors are partially targeted on the basis of their customer satisfaction results.

In the UK, our customers’ organisations are surveyed by Advantage Group, an independent provider of business relationship benchmarking, covering all areas of our interactions with customers from supply chain to marketing support, and this year we are pleased to report we came 8th, a significant improvement compared with our performance in the previous two years. In ROI, similar “Voice of Customer” surveys of our on-trade and off-trade customers are carried out by Behaviour and Attitudes, an independent research agency.

ROI

Our brand campaigns continue to have a community focus. In FY2012 we launched the Bulmers “doing our bit campaign”. This continued in FY2013 with the “Doing Our Bit” Christmas promotion 2012 where winners received €2,000 for themselves and €2,000 for a community cause of their choice. We also engaged in many local community activities, including the Annerville Awards and various charitable donations including a donation to Musical Youth Foundation enabling it to launch Its ‘Guitars for Kids’ project for children in the Rutland Street area, Dublin.

Bulmers continued its support of Tall Ships Dublin and the Forbidden Fruit Festival, which brings top music acts to Dublin at an affordable price for consumers. We also participated in the Irish Training and Employment Authority’s Redundant Apprenticeship Scheme, enabling five apprentices to complete their apprenticeships.

Northern Ireland

Tennent’s Vital is Northern Ireland’s biggest music festival, and the annual sponsorship of this event by Tennent’s helps bring world-class musicians to Northern Ireland. Again in the summer of 2012, through ‘Tennent’s UnTapped’, two unsigned acts were offered the chance to showcase their music by playing onstage at the event.

Scotland

Over 7,000 students have now been trained at the Tennent’s Training Academy for the pub and hospitality industry. To complement the Tennent’s Training Academy, in 2012 we launched a modern “apprenticeship plus” programme to give 25 young people additional skills in hospitality businesses in Scotland. We have offered work experience placements for school and university students, as well as taking on engineering apprentices for the first time in 17 years. After investing in new visitor facilities, we have opened the Wellpark Brewery for public site tours.

Tennent’s is a founding partner of T in the Park, one of the top music festivals in Europe, which helps bring some of the world’s biggest music stars to Scotland. Since 1996, Tennent’s T Break has enabled the most fresh and exciting unsigned talent in Scotland to showcase their music on the T Break Stage at T in the Park. The T Break team also offers one student a six-month music internship.

C&C Group’s sponsorship of Celtic and Rangers football clubs also has a strong community element, with the “Could Have Been A Player” programme enabling some of our consumers to live their footballing dream by playing at the clubs’ stadiums. We donated sponsorship rights to Celtic and Rangers U19 and Women’s teams to promote the clubs’ respective Charity Foundations.

We have also strengthened our links to Scottish farmers by sourcing all of our barley from Scottish farms. We continue to support fledgling businesses in brewing and farming in Scotland through our Seed Fund initiative. 5p from every pint of Caledonia Best sold during its first six months was donated to the Seed Fund raising £58,000 for innovative projects selected by us in conjunction with National Farmers Union Scotland and Heriot-Watt University’s International Centre for Brewing and Distilling.

England

In Shepton Mallet, we launched a £1 million agricultural investment fund. The major part of the fund has already been disbursed in grants to local growers, who were selected in conjunction with the local Chamber of Commerce and local MP Tessa Munt. Together with our long-established 20 year apple buying contracts, the fund helps ensure a sustainable future for our apple growers.

We also support the local community through numerous local sponsorships, including sponsorship through our Blackthorn cider brand of Bristol City and Bristol Rovers football clubs and Bristol and Shepton Mallet rugby clubs, and by donations to various local groups and charities.

RESPONSIBLE DRINKING

The Portman Group

C&C is a member of The Portman Group, the UK industry body set up to ensure that the marketing and promotion of alcohol is consistent with responsible drinking. The Portman Code of Practice seeks to ensure that alcohol is promoted in a socially responsible manner and only to those over 18 years of age. Over the last 12 months, as a member of the Portman Group Council, we have worked hard to update the Code. Its 5th edition was launched in the autumn of 2012, and updates the Code to fit in with the changing media landscape, particularly social media, and the promotion of lower strength alcoholic products. We hosted a training day in Glasgow for local drinks businesses and are now implementing the updated Code across all of our marketing and promotional activity. As a result of our extensive experience in music and sports sponsorships we are also taking a leading role on updating the Portman Group’s sponsorship code.

Public policy leadership

In September 2012 we took over the chair of the National Association of Cider Makers (NACM), a major step forward as we were only admitted to the association a few years ago. The principal objectives of the NACM are the promotion of the merits, qualities, heritage and authenticity of cider and the cider-making industry, engagement with tax and regulatory bodies and opinion-forming bodies having an interest in cider and/or alcohol generally, and leading by example in sustainability, community engagement and alcohol responsibility. The NACM is the first drinks trade body to work with Business in the Community (BITC) to address sustainability. It also hosts twice yearly Parliamentary receptions for around 300 MPs interested in developments in the cider industry.

We have worked with the pomology and technical experts in the NACM to develop our sustainability agenda.

On the global cider stage, with the NACM, we have supported the creation of the United States Association of Cider Makers (USACM) and we are represented on its board and legislative committee. We are already working on a revised definition for cider in the US allowing higher carbonation, more aligned to European levels. Additionally, in Europe we are key influencers within the European Cider and Fruit Wine Association (AICV). Working with these and other organisations enables us to press for consistency in cider definitions across the world, which is important for our global expansion aspirations.

Public Health Responsibility Deal

In March 2012, the Group joined with the majority of the alcohol industry to pledge a reduction of one billion units of alcohol from the 52 billion units currently anticipated to be consumed in the UK up to 2015, with 30 million units of that reduction coming from the Group’s products. This is ongoing and will be achieved by the greater presence of lower alcohol products in our portfolio, the first of which is Caledonia Best ale.

Scottish Government Alcohol Industry Partnership (SGAIP)

Tennent’s was a founding and remains an active member of the SGAIP. The SGAIP has undertaken various initiatives over the last six years towards achieving a reduction in alcohol misuse in Scotland. As part of this programme, we have joined the “Best bar none” scheme, through which we hope to improve the night-time economy of many Scottish high streets.

Minimum Unit Pricing

The Scottish Government has passed legislation to introduce minimum pricing for alcohol, and in the rest of the UK consultations on minimum unit pricing are underway. In each market we support these proposals as long as they are fair, proportionate and reasonably implemented, and are part of an overall programme to reduce the abuse of alcohol. The legislation in Scotland is currently the subject of a legal challenge and we await the outcome.

Responsible Drinking Initiatives

The Group has continued its commitment to responsible drinking messages throughout the last 12 months and we are an active member of Drinkaware. Tennent’s again donated advertising space in its football sponsorships to Drinkaware’s “Why Let Good Times Go Bad?” campaign.

T in the Park leads the way in communicating responsible drinking messages. During the festival, Tennent’s once again operated ‘Be Chilled’ at T in the Park, which comprises a facility for consumers camping at the festival to pre-order and collect chilled Tennent’s Lager to encourage trading down. All communications carried responsible drinking messages including emphasis on eating (‘Healthy T’) and alternating alcoholic drinks with water. T in the Park provides free drinking water across the festival site via standpipes.

ROI

Bulmers adheres to all of the alcohol marketing, communications and sponsorship codes of practice in place in ROI.

Bulmers is committed to promoting the responsible serving, and consumption of alcohol in ROI, and it is a member of the Alcohol Beverage Federation of Ireland (ABFI) and the Mature Enjoyment of Alcohol in Society Limited (MEAS). We adhere to the ABFI and MEAS voluntary codes governing both the placement and promotion of alcohol. All brand communications carry the “Enjoy Bulmers Sensibly. Visit drinkaware.ie” taglines, and Bulmers contributes finance and marketing resources to the production of drinkaware.ie communications and media planning in Ireland. In addition, we continue to work on proposals outlined by the Irish government as part of their alcohol strategy.

Overseas markets

We work with our distributors to ensure that the marketing and sale of our products in our international markets complies with all relevant local laws and regulations in this regard.

In the USA where we have increased our presence through the acquisition of Vermont Hard Cider Company, we are committed to promoting responsible serving and consumption of alcohol.

EMPLOYEES

Developing, engaging and rewarding employees fairly is fundamental to the success of our business and also to the relationships that we have with the local communities in which we work.

We are an equal opportunities employer. We aim to create a working environment in which all individuals are able to make best use of their skills, free from discrimination or harassment, and in which all decisions are based on merit. We have a formal equal opportunities policy that commits us to promoting equality of opportunity for all our staff and job applicants. For our operations in Northern Ireland this includes adherence to the MacBride Principles. Our policy states that we do not discriminate on the basis of age, disability, marital status, ethnicity, creed, sex or sexual orientation. The policy also requires our staff to treat customers, suppliers and the wider community in accordance with these principles as well.

Health and wellbeing of employees

In December 2012 we conducted a safety climate survey across our three manufacturing sites in Clonmel, Wellpark and Shepton Mallet using surveys based on the internationally respected Health & Safety Executive’s Safety Climate Survey. Over 80% of employees in manufacturing participated and a detailed report of the findings was presented to each manufacturing site’s leadership teams.

During FY2013 we have reduced the number of days lost due to accidents by 48% and the number of total accidents by 18%. In the last two years we have reduced our total accident rate (being the aggregate of lost days and total accidents) by over 41%. Our site at Wellpark has now gone for over 1,800 days without a lost time accident.

We have commenced a safety behaviour programme across manufacturing. We have also invested in focused training & development for our employees, including machine specialist skills, business improvement techniques and compliance training.

Business continuity

Business continuity exercises, facilitated by external experts, were held at Wellpark and at Shepton Mallet during September 2012. Suggestions made at those exercises have led to a revised business continuity and action plan. A similar exercise was carried out at Clonmel in March 2013.

(back to top)