Drinks group C&C suffered yet another setback yesterday after new data showed that a rival cider is eating into the market share of its own Magners cider in the UK off-licence market, bringing into question the group's claims that bad weather was behind the recent decline in sales.

The shares fell more than 7 per cent following the report, before rallying later in the session.

C&C, which has recently sold off its soft drinks business to focus on alcoholic beverages and, in particular, its trademark cider-over-ice, saw sales of Magners increase by just over 19 per cent in the four weeks to August 11th in the UK off-trade market - drinks not sold in pubs and bars - according to data published yesterday by AC Neilsen.

This compares with an 80 per cent increase in sales of rival Scottish & Newcastle's Bulmers cider. (C&C's cider trades as Magners in the UK and Bulmers in Ireland).

The Irish company's shares fell as much as 7.6 per cent on the news before recovering some ground to close down 5.5 per cent, or 30 cent, at €5.20. Trading was fairly heavy, with as many as 5.7 million shares changing hands.

Traders said the main concern was that this news would lead to yet another profit warning.

C&C was forced to issue two profit warnings within three weeks this summer, citing poor sales of its cider in both Britain and Ireland.

The company has blamed the bad summer weather for the slowdown in sales of the drink that became very popular during the warm weather experienced last year. Cider has been the company's main growth accelerator over the last two years.

While the weather has also been cited by rivals as prompting a slowdown in sales of some beverages, this latest data shows that C&C must be falling down in other areas too. Traders said a growing issue now was price, with Scottish & Newcastle selling its cider at a 20 per cent discount to C&C in the off-trade market.

Earlier this month, C&C said poor cider sales resulting from the bad summer and tougher competition could leave its first-half profits trailing the previous year by as much as €40 million. Last year the company reported operating profits of €113.5 million for the period. It is due to release its figures for the first half of this year on October 10th.

The decline in sales of what has become C&C's trademark has also forced the company to lay off as many as 70 people from its production plant in Clonmel, Co Tipperary.

C&C, last year one of Ireland's best performing stocks and at the start of the year one of the top stock picks for this year, is currently trading at about a third of the level it was at at the start of the year. The drop, from almost €14 down to just over €5, has wiped more than €1.5 billion off the company's market value.