Higher cost of sales and lower production volumes resulted in a 35 per cent decline in Red Stripe's net profit for the nine months ending March 31, 2010.

Revenue for the review period of $9.9 billion was one per cent higher than year-earlier levels, but the increase largely reflected a price increase taken last year in light of the changes in the Special Consumption Tax rate.

"This (increase in tax rate) continues to have an adverse impact on our domestic volume performance and as a result net sales value is four per cent down on last year, continuing the trend reported at the end of the second quarter," said a statement to shareholders accompanying Red Stripe's financial statement. On the other hand, Red Stripe's "value of export shipments increased 16 per cent in the quarter relative to last year, driving a three per cent growth for the nine-

month period".

At the same time, production and cost efficiencies generated were insufficient to offset the impact of lower volumes and increased raw material prices brought on by the devaluation of the Jamaican Dollar, according to the local brewer.

Cost of sales in the nine-month period increased to $5.4 billion, up from $5.1 billion incurred during the comparative period a year before.

"The increase in cost of sales also reflected additional investment in the leasing of new trucks to strengthen our domestic route-to- market."

The firm's total marketing cost was $1,036 million (2009: $1,015 million). Of this amount, $687 million (2009: $620 million) was spent in the domestic segment.

"The increase over the same period last year reflected our strategy to maintain investment behind our core brands," added Red Stripe. "The export marketing cost was $45 million lower than last year, reflecting a relative change in the timing of the planned expenditure."