Corporate Responsibility

The Group operates a corporate responsibility and sustainability policy which is designed to meet the demands of its stakeholders in as economically, environmentally and socially responsible way as possible in line with the key values of our organisation.

Environmental Impact & Energy

Our operations teams in each of the Group’s manufacturing facilities are actively working on reducing our impact on the environment. Their focus is reduction in consumption of energy, water and other raw materials as well as waste going to landfill and greenhouse gas (GHG) emissions. We also actively continue to review mechanisms whereby we can increase transportation efficiency.

Compared with FY2014, electricity used per hectolitre of product produced in our manufacturing sites at Clonmel, Shepton Mallet and Wellpark reduced by 3%. Total production volumes across these 3 sites were similar to the previous year. By FY2015 we reduced our energy usage at these sites by 12% compared with FY2012, exceeding our target of 11% previously set for this period. We continue to review our energy usage, and revise these targets annually.

Having introduced data collection processes at the Gleeson production sites in FY2015 we are now able to report on fuel and energy usage in this business for the first time, and these production sites will be included in the new targets being set.

Our manufacturing sites 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). Clonmel was reaccredited to the ISO 50001:2011 Energy Management Standard. These standards require us to demonstrate the systematic management of energy leading to a decline in GHG emissions. The Gleeson sites have their own environmental management system in place, and at Clonmel and Borrisoleigh 100% of the electricity provided by our electricity supplier comes from renewable sources. Our environmental management systems at Wellpark are aligned with Clonmel and Shepton Mallet and continued to meet their regulatory targets in FY2015. In the UK we continue to avail of the Government’s small emitters opt out scheme.

In Vermont, following the introduction of our new cidery, 10% of our electricity usage was derived from renewable sources, including the “Cow Power” scheme which generates electricity from cow manure using methane digestors on dairy farms (and has achieved a reduction in carbon equivalent to planting 1,000 acres of pine forest), and purchases of electricity from regional solar power projects.

Significant investment has been made at our apple-crushing facility in Portugal to improve emissions from the boilers, optimise the treatment of effluent and improve the operating efficiency of the site. The most recent improvement was the construction of a new effluent discharge system.

Sustainable Logistics

During FY2015, we began the process of consolidating our depots in Scotland for the newly integrated Tennent’s and Wallaces Express businesses which is expected to deliver:

• Reduction in the number of depots from eight to five resulting in a reduction in the total depot footprint by 5,500 square metres.
• Reduction in the number of deliveries to customers who were previously supplied separately by each business by 50,000, which will equate to a subsequent saving of 700 tonnes of CO2e per annum.
• Additional initiatives to increase delivery efficiency which will further reduce the number of deliveries by approximately 20,000, equating to 160,000 road kilometres.

The Gleeson integration in Ireland in FY2014 created opportunities to consolidate deliveries being made from our warehouse in Clonmel for both beer and cider in FY2015, resulting in an increase in loadfill levels. Plans are now in place to extend this initiative with consolidated deliveries to our major customers’ despatch centres during FY2016.

In England, Downtons (a logistics partner) have upgraded 170 of their tractor units to Euro 6 standard, which have more fuel efficient engines. This has resulted in an 18% saving in fuel across 660,000 road kilometres, which is equivalent to a saving of 197 tonnes of CO2e.

Packaging

We continue to benchmark our SKU’s to ensure that we take every opportunity to light-weight our packaging and make full use of recyclable materials. We work with our multinational suppliers in this area to make best use of their expertise, and we also look at efficiencies in the supply chain. For example, we down-gauged a number of our can SKU’s this year, reducing our aluminium requirement by 5%, and we also increased the number of cases of cans loaded onto pallets by 12.5%, resulting in improved transport efficiencies.

In one of our Gleeson plants we introduced shrink wrap packaging to replace trays and boxes for one of our 12 x 1,500ml packs, which resulted in a net annual reduction in packaging weight of 16 tonnes. We also reduced the weight of preform bottles enabling us to save 37 tonnes of PET plastic in FY2015.

At Wellpark, we introduced shrink wrap packaging which enabled us to reduce the total packaging weight by up to 34%, equating to 568 tonnes of cardboard for the year, and between 60% and 70% of the glass used in our bottles is recycled. We continue to participate in the Packaging Recycling Group Scotland where, along with Resource Efficient Scotland, we aim to make further advances in the recycling of packaging after a detailed analysis throughout our supply chain.

Carbon Consumption

The Group continuously monitors the impact of its operations on the climate and we look to reduce our GHG 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. The Group has historically scored highly in the CDP Ireland Report, showing disclosure scores which are amongst the best in its sector. This year’s disclosures to CDP will include data for Wallaces TCB and Gleeson for the first time, as we continue the ongoing process of expanding data collection and reporting across our more recently acquired businesses. Scope 1 and 2 CO2 emissions in FY2015 are broken down across our manufacturing sites as follows:

These emissions figures include the impact of the new cidery in Vermont, the new brewery at Clonmel, and also increased production volumes at Wellpark.

In FY2015 we invested €1 million in capital at Wellpark to deliver significant energy efficiencies across the site which is expected to reduce GHG emissions by around 2,000 tonnes per annum. Similar audits are now being carried out in other sites to identify further savings.

In Ireland and the UK, through our commitment to rural development, we support orchard growers who manage over 2,000 hectares of orchards for apples used directly in the production of our cider.

We ensure compliance with national packaging regulations for our products placed into the marketplace. In ROI we also recovered and recycled 2,556 tonnes of CO2 produced by the cider fermentation process and used it to carbonate our products.

Waste

We have systems in place across all manufacturing sites working towards maximising the recycling of waste we produce and hence minimise what we send to landfill.

In FY2015 both Clonmel and Wellpark sent zero waste to landfill. This was due to general waste reduction, increased waste stream segregation allowing more recycling, manual sorting of residual general waste to remove any recyclable materials and then sending the residue to a Refuse Derived Fuel (RDF) facility where electricity is generated. At Shepton Mallet, general waste volume for the year has dropped by 53% since FY2012 through improved segregation and recycling.

In FY2016 the same techniques employed at Wellpark and Clonmel will be implemented at Borrisoleigh and Shepton Mallet in order to reduce their waste going to landfill.

The management of waste from our apple-crushing facility in Portugal is now handled by professional third party contractors. Recycling schemes have been instigated to improve segregation and site awareness training programmes completed. We have also invested in optimising the treatment of effluent.

Water

At all the Group’s manufacturing sites, water preservation and management is an important business consideration and we continue to monitor the usage of water per hectolitre of finished product from each manufacturing facility and across our supply chain. Each year the Group participates in the CDP Water Disclosure initiative in ROI and the UK.

In FY2015, our total water usage at our Clonmel, Shepton Mallet and Wellpark sites dropped by 1%. This is equivalent to 3.5 hectolitres of water used per hectolitre (hl/hl) of product produced, which is significantly better than the recognised industry benchmark of 4 hl/hl. In Wellpark a number of initiatives were implemented resulting in a 12.7% reduction in water usage and an effluent reduction of 17.6%.

Our aquifer protection programmes in Clonmel and Borrisoleigh have resulted in us retaining our successful accreditation to the Irish IS 432:2005 standard at both sites. 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. We also recover biogas from our anaerobic waste water treatment plant in Clonmel for use as fuel in our boilers.

Procurement

Our Sustainable and Ethical Procurement Policy is being updated and sent out to suppliers. This Policy is monitored by the Board via the Group Operations 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 review and assess our suppliers’ track record in environmental management, health and safety, sustainability and corporate social responsibility through the tendering process and supplier reviews.

We seek to support our suppliers through entering into long term supply arrangements with our suppliers of apples and barley, our key raw materials. We also leverage the expertise and capabilities of our suppliers to ensure C&C optimises the materials we use and continuously reduce our impact on the environment.

Monitoring equipment has now been installed at our apple processing plant in Portugal to enable us to measure water consumption in key areas across the site.

Green Production

In FY2015, we crushed 90,000 tonnes of apples and 3,000 tonnes of pears in our milling operations across the Group. The investment scheme launched by the Shepton Mallet Cider Mill in FY2013 has made significant progress. Around 40,000 trees have been procured during the first two years of the programme and planting is well underway.

We encourage sustainable agricultural practices and the preservation of biodiversity. In the UK 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. The NACM is the first drinks trade body to work with Business in the Community (BITC) to address sustainability, and we have worked with the pomology and technical experts in the NACM to develop our sustainability agenda.

Community Engagement

During the last year we continued with our strategy of transferring resources and efforts from national schemes to local initiatives that will have a more positive impact on the communities in which we operate. A significant part of this is our approach to charitable activities, where we aim to support charities that have a local impact.

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 an Irish company, established in ROI’s low tax environment, with our major Irish cider production unit located in Clonmel and the Group headquartered in Dublin. The majority of the Group’s profits are earned in ROI and the UK, which both have competitive corporation tax rates compared with the European average. In ROI and the UK we remit substantial amounts of duty on alcohol production.

Ireland

We support a diverse range of sporting events from horse racing to the Dublin and Cork city marathons. We are also supporters of live music events. Tennent’s Vital is Northern Ireland’s biggest music festival, and the annual sponsorship of this event by Tennent’s NI helps bring world-class musicians to Northern Ireland. In ROI, we continue to support the Forbidden Fruit Festival, the Kilkenny Trad Festival and Bulmers Live at Leopardstown, which sees live music acts alongside evening racing events.

Our newly opened craft beer brewery on the site of our cider mill in Clonmel has now commenced production of our Irish beer products. This new brewery facility is helping us to capitalise on the growing craft beer category both in ROI and overseas, and it will also add additional investment and job security to the local community in Clonmel.

We also provide work experience at our Clonmel site for students in technical and manufacturing areas.

In Northern Ireland we have now raised £20,000 for the Friends of the Cancer Centre charity. In the Republic of Ireland we continue to use our brands to raise money for local charities. During the last financial year we promoted, both in-store and in the media, the Irish Society for the Protection of Cruelty to Children and donated free Tipperary Water.

We have recently entered into a new charity partnership with Bumbleance through Tipperary Water. This charity provides a unique, child-centred professional ambulance transport service, catering for the needs of seriously ill children en route to and from the principal centres of care. We donated €15,000 as well as free stock of Tipperary Water, and we are working with the charity in the manufacture of a Bumble Bee soft toy. In addition we continue to donate to the Musical Youth Foundation, an organisation that provides music lessons to children in disadvantaged areas. We also donated around €5,500 worth of free stock of Finches and Tipperary Water to a wide range of local charities.

We are in discussions with the local Tipperary County Council about donating a strip of land at Clonmel beside the river Suir to develop a greenway along the river for cyclists and the general public.

Scotland

For many years we have provided financial support through trade lending facilities to enable our customers to improve their on-trade premises so that they remain vibrant parts of the local community. In FY2015, we advanced a gross total of approximately £4.5 million to our customers in Scotland.

We continued support for a number of charities including the Prince and Princess of Wales Hospice, St. Andrew’s Hospice and raised £1,078 from the Tennent’s staff Christmas party. In September 2013, as part of our partnership with Celtic FC, Magners Irish Cider announced an initiative to donate £150 for every goal scored to the Celtic FC Foundation. This raised over £18,000 for the good causes supported by the Foundation. Magners then offered fans the opportunity via a social media vote to determine how this money was split across the Foundation’s four priority areas of Health, Equality, Learning and Poverty.

We provide valuable support to those setting out on a career in the pub and hospitality industry. The Tennent’s Training Academy, which offers a wide range of training programmes with nationally recognised qualifications in all aspects of the hospitality industry, has now trained over 16,000 people. The Tennent’s Training Academy has expanded its operations over the last 12 months offering a wider range of courses and improved new facilities such as the Innovation Suite. We continue to support the modern apprenticeship scheme, with four modern apprentices currently working at Wellpark.

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. The festival is now in its 22nd year, making it one of the longest running music festivals with a single sponsor in the UK. We also continue to support Scotland’s unsigned music talent, and this year 16 artists will be offered the chance to play on the T Break stage at T in the Park.

During FY2015, the Drygate Brewery opened on our site in Glasgow. This joint venture brings craft beer and a superb retail establishment to the east end of Glasgow. This provides a useful resource for people living and working in the area. It has hosted many cultural events such as music and comedy nights, which have proved very popular.

England

We are actively involved in the ‘Keeping Somerset Orchards Alive’ community orchard projects, and have allocated €50,000 to restore and plant traditional orchards and promote traditional orchard craft and local cider making, with several projects already completed and more to follow utilising the benefits of this funding.

We have continued our support for the local community through numerous local sponsorships, including sponsorship through our Blackthorn cider brand of Bristol City and Bristol Rovers Football clubs and Bristol Rugby club. We also support shows in the South West including the Mid Somerset Show and donate to various local groups and charities.

North America

In FY2015, Vermont Hard Cider Company donated over $80,000 to local groups and charities. The biggest recipient of our charitable donations continues to be Survivorship NOW, a cancer survivor and supporter organisation that helps bridge the gap between cancer treatment and recovery. We donated $30,000 to the organisation and are in our third year producing our Woodchuck Private Reserve Pink cider in their honour.

We have also upheld our commitment to our orchard partners in the state of Vermont. We donated $10,000 to the Working Lands Enterprise Initiative (WLEI), an organisation that invests in the growth of Vermont’s agricultural landscape. The funds we donated to WLEI will contribute to studies regarding the growing of cider apples in the state. As part of our Earth Week social media campaign, we also donated over $5,000 to both the Vermont Tree Fruit Growers Association and the American Forests organisation.

One Water

In May 2014, we announced that we were to support One Water, the UK’s leading ethical bottled water brand. As part of our community involvement programme, we have pledged to sell £1 million of One Water in the UK on-trade (pubs, clubs and hotels) through our distribution networks. All of One Water’s profits are donated to The One Foundation charity which operates across Africa to provide water to some of the world’s poorest communities. To date, One Water has raised over £10 million and has changed the lives of over 2.5 million people.

Responsible Drinking

Public Policy Leadership

During the last twelve months we held the Chair of the National Association of Cider Makers (NACM) and we now have a seat on the board of that organisation. This has put us at the heart of many UK government discussions relating to the responsible use of alcohol. The NACM is also engaged with tax and regulatory departments and opinion-forming bodies having an interest in cider and/or alcohol generally. Through our leadership of the NACM, we helped secure a cider excise duty cut of 2% in the UK.

On the global cider stage we are active in the United States Association of Cider Makers (USACM) and we are represented on its board and legislative committee. We have worked on a revised definition for cider in the US allowing higher carbonation, which is more aligned to European levels. This change is currently progressing through the Senate in Washington and we are hopeful of legislation being concluded this year. If successful this will be an important boost for the growing American cider industry.

Within 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. We have joined this organisation as a corporate member.

Local Government

A large number of local authorities in England and Wales have implemented restrictions on the sale of high-strength beer and cider. We have a very small commercial interest in these products. We are working with local authorities, trade bodies and central government in order to ensure steps to tackle alcohol misuse are undertaken in a non-discriminatory fashion.

Public Health Responsibility Deal UK

We continue to support the eHealth responsibility deal pledges that were made in March 2012 and are delivering our commitments against these pledges. We have disposed of high-strength cider brands and launched lower alcohol strength products to deliver our units reduction pledge.

Review of Alcohol Trade Body Memberships

During FY2015 we completed a review of our trade body memberships. The basis of the review was to ensure that good value was achieved by us. The assessment was made by evaluating cost of membership versus the social benefits in terms of responsible drinking and associated community actions. In the case of four organisations we decided that we can achieve greater efficiency for our responsible drinking programmes and, as a result of this, we resigned our memberships of The Portman Group (UK), the British Beer and Pub Association (UK), Mature Enjoyment of Alcohol in Society (Ireland) and the Alcohol Beverage Federation of Ireland (Ireland).

Notwithstanding that we will have ceased to be members of these trade bodies, we will continue to adhere to their codes of conduct where appropriate, and we remain fully committed to the promotion of responsible drinking. We remain active members of Drinkaware, where we support their work to provide consumers with more information about responsible drinking.

Best Bar None

As part of our strategy of focusing on local customers and consumers with responsible drinking messages and activity we continue to be a member of the Best Bar None scheme. The aim of this scheme is to improve the night time economy of many Scottish high streets, making them safer and more enjoyable places to be.

Scottish Government Alcohol Industry Partnership (SGAIP)

Tennent’s was a founding member of the SGAIP. The SGAIP has undertaken various initiatives over the last seven years towards achieving a reduction in alcohol misuse in Scotland. The notable achievements of the SGAIP over the last 12 months include doubling the availability of small wineglasses in the Scottish on-trade.

Legislation relating to Tied Pubs

The UK Small Business Enterprise and Employment Act 2015 includes provisions giving pub tenants the opportunity to opt out of the tied arrangements requiring them to buy beer and cider from the owner of the pub and to choose to pay market rent for the premises instead. These provisions currently only apply in England and Wales but we are engaging with the Scottish Government to seek to have similar legislation enacted in Scotland, which will be an important boost for Scottish pubs as it will give entrepreneurial tenants more opportunity to shape the future of their businesses.

Minimum Unit Pricing

The Scottish Government has passed legislation to introduce minimum pricing for alcohol. This legislation is now the subject of judicial review as third parties have brought a legal challenge. The Governments of the Republic of Ireland and Northern Ireland have also stated their intention to introduce minimum unit pricing for alcohol. We have been supportive of all of these initiatives provided they are fairly, reasonably and proportionately implemented and are part of a range of initiatives to help reduce the misuse of alcohol.

Responsible Drinking Initiatives

We have continued our commitment to promoting responsible drinking in all the markets in which we operate. In addition to adhering to the relevant guidelines and legislation, we have also implemented a number of additional programmes to promote responsible drinking.

We launched Tennent’s Lemon T, a lighter Radler-style beer which contains only 2.8% alcohol, containing less than one unit of alcohol per bottle, and we are in the process of launching T2, a variant of Tennent’s containing only 2% alcohol. In response to the lower drink-drive limit that was introduced in Scotland in December 2014 we launched Tennent’s Hee Haw, a 0% alcohol beer, which gives consumers the choice of an alcohol-free beer. We also continued the development of our non-alcoholic product range, with increased marketing and promotion behind the Finches and Tipperary brands in Ireland, and we will shortly be launching our JWV+ soft drink product.

At T in the Park 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.

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

FY2015 saw two distinct strategies implemented in our manufacturing plants to meet our safety, health and environmental objectives;

• Year-on-year improvements in staff engagement and involvement in health and safety.
• Initiatives that have been successful at Clonmel, Shepton Mallet and Wellpark rolled out into the Borrisoleigh production facility.

As a direct result of these initiatives we were able to actively reduce our number of lost time accidents across all sites. Our site in Clonmel achieved zero lost time accidents last year for the first time, with Shepton Mallet reducing their number of accidents by 80% in the same year. These achievements clearly demonstrate the direct correlation between employee engagement and management commitment to the reduction of lost time accident rates. Staff engagement levels indicators in safety and health have increased six-fold across the Group compared to FY2014.

Within our manufacturing sites, we recognised the need to educate staff to a higher level of competence within FY2015 in order to improve safety. Following on from Tennent’s Caledonian Breweries’ successful accreditation from the Royal Environmental Health Institute of Scotland (REHIS), accreditation has also now been gained to deliver the courses at Shepton Mallet. To date over 150 members of staff have successfully gained health and safety qualifications through the scheme.

Significant changes to health and safety practices have been enacted in Borrisoleigh. These include changes to the ways of working as well as substantial improvements in safety equipment such as access platforms, fire safety measures and improved pedestrian safety.

We encourage reporting as this is the most effective way to make our working environment safe for our employees.

During FY2015, in our apple-crushing facility in Portugal we have continued with a significant programme of improvements in health and safety with the key focus being on risk assessments, documenting safe work practices and investing in facilities to provide a safer working environment for employees. A full time role has now been appointed to the site management team to co-ordinate these improvements and develop strategic plans going forward into FY2016.

Following a comprehensive gap analysis across our manufacturing sites, a team manager training and development programme was launched in FY2015 in Wellpark, Shepton Mallet, Borrisoleigh and Clonmel. The key outcomes from this programme are to build leadership capability, further increasing focus on production efficiency, improving staff engagement and delivering key business objectives.

Occupational health services continue to be offered and improved at all our manufacturing sites to treat work related injuries, provide annual health checks and support health awareness programmes.

The manufacturing sites continually strive to improve employee engagement through an active programme of team briefs, team building days, safety days and social events which are used to support local clubs and charities.

Personal Development

A focus for FY2015 was on developing our people managers. Across each of our sites, our operation team managers participated in a management development programme, which focused on the areas of health and safety, quality, people development and operational efficiency. In our Irish business, all managers participated in a people management workshop focusing on the areas of managing performance, communicating effectively, managing change and influencing. The workshops have resulted in improved people management capability and similar workshops will be introduced across other areas of the business in FY2016.