THE owner of Tennent’s Lager has declared sterling’s collapse since the Brexit vote has hit operating profits by nearly €8 million, while warning that the continuing political uncertainty was making it challenging to make predictions on trading patterns and consumer behaviour.

And Dublin-based C&C Group underlined its hope that a hard border is not re-introduced between the Republic of Ireland and Northern Ireland, the possibility of which has risen as a consequence of the vote to leave the European Union (EU).

The company, which entered the Scottish market with the £180 million acquisition of Tennent Caledonian from AB InBev in 2009, said trading conditions had been tough last year, with net revenue sliding by 6.9 per cent to €559.5m in the 12 months to February 28.

Stripping out the foreign exchange impact of sterling’s collapse since last June’s Brexit vote, operating profit at C&C was steady at €95m, with growth achieved in the second half on a constant currency basis.

C&C chief executive Stephen Glancey emphasised the €7.8m hit to profits from weaker sterling was a “translational issue” for the Irish firm, which reports in euros, while stating the “profound” fall in the pound was the most immediate effect of the decision to leave the EU. But he noted Brexit has brought other concerns.

Mr Glancey said: “The big thing about Brexit is the political uncertainty it brings and not having visibility and transparency of what might happen. If you are an investor into the UK or Europe, that uncertainty makes you a bit more cautious than you might otherwise have been.

“We like open borders in terms of moving goods, we like to move our exports from Scotland and our exports from Ireland into the markets we do [sell to], and we like to do that in the way that we have done for the last decades. That’s what we are looking for.”

C&C said the prospect of a hard Border being introduced on the island of Ireland was among numerous political uncertainties facing the company. It said it was encouraged by the “initial determination on both sides to minimise the potential economic and political friction” such a move would bring. Mr Glancey said a hard border would be “complex” to deal with but not “transformational”.

In Scotland, C&C said rising unemployment, due partly to the oil and gas downturn, and economic growth lagging the rest of the UK, meant consumer confidence had been “more subdued” than in other “domestic” markets.

Beer volume was flat in Scotland after a “high single digit (percentage) decline linked to the tightening of drink-driving legislation” last year, with revenue down by 3.9 per cent to €285m.

Tennent’s Lager saw overall volumes fall by 1.3 per cent in Scotland. However exports of the brand grew by 17 per cent, amid growth in markets such as Africa, South Africa and South Korea.

Asked if the weaker sterling had boosted exports, Mr Glancey said: “I think it has helped Tennent’s. Our exports are up 17 per cent year on year.”

He added: “The valuation of currency, I think, will make it more attractive to exports from Scotland. The key thing is we think that Tennent’s is exportable, and there is a reasonable consumer pull for the brand.”

Andrea Pozzi, who runs the Tennent’s business, said trading conditions in the Scottish on-trade have been “decent” recently, helped by clement weather and major sporting events. On the revaluation of business rates, which threatened to put pubs across Scotland out of business before the Scottish Government introduced transitional relief, he said the impact on the industry will vary outlet by outlet. Mr Pozzi said the company was supporting the industry where it could.

Mr Glancey said the combination of business rates, national living wage, apprenticeship levy and food inflation was having a dramatic impact on cost for licensed operators, which could have a damaging effect on the tourism. He reiterated C&C’s support for a reduction in VAT for the hospitality industry.