Is cider still the apple of our eye as Magners sobers up?

Cider was being made in Britain before the Romans arrived and at various times it has been so abundant that it was used to pay farm wages and as an alternative to water during baptisms.

Never has cider tasted so sweet, though, as it did recently when it overtook beer as Britons' preferred takeaway from off-licences.

Yet after four years of stellar sales, critics are calling time on the boom as the group credited with rejuvenating cider's image, Ire-land's C&C, emitted a financial hiccup.

Cider has swung in and out of fashion. In the early 1990s, Diamond White and Max were all the rage before alcopops elbowed traditional drinks to one side. In the 1960s and 1970s, perry (or pear cider) even enjoyed a stint in the limelight thanks to Babycham.

The industry, however, is adamant that this current renaissance has some way to go. As evidence, it points to the aggressive battle being fought by some of the UK's biggest drinks firms for supremacy in the sector. The likes of C&C, Scottish & Newcastle and Constellation Europe have spent tens of millions on cider adverts in the past few years.

What remains to be seen is whether that cash is going down the drain.

When C&C launched Magners Original in 1999, cider was in urgent need of a makeover. Back then, it was viewed as a drink for people on park benches or teenagers getting their first alcoholic kicks.

By lowering the alcohol content, putting the drink in a trendy bottle, serving it "over ice" and launching a [pound]30m advertising campaign, C&C started to make cider cool again. In 2005, a year after the company floated, sales increased by 350 per cent. In 2006, they grew by 225 per cent. Rivals quickly latched on to the potential of cider and the sector swung into boom, showing 26 per cent volume growth in the year to July 2007 against broadly flat beer sales, according to research firm AC Nielsen. We are now drinking more than one billion pints of cider a year.

Yet in the midst of all this, C&C has issued two profit warnings in just over two weeks, while its shares have fallen by almost 20 per cent.

Maurice Pratt, C&C's chief executive, blames the wet summer, as well as stiff competition, for a 30 per cent fall in volume over July. Operating profits are expected to be 35 per cent lower than last year and analysts say there is "no visibility" going forward.

Paul Walsh, the chief executive of drinks giant Diageo, said recently that the cider market was "pretty crowded and we don't see it having a lot of legs outside the UK." He added: "It's not clear to me that the cider trend is long-term trend."

Part of C&C's problem is that Magners has fallen victim to its own success. The over-ice concept - beautiful in its simplicity - also proved easy for competitors to copy. Scottish & Newcastle introduced an over-ice Strongbow drink, called Sirrus, and then brought Bulmers Original on to the market in direct competition with Magners. In a strange twist, Magners brews Bulmers in Ireland but the drink has no links with S&N's product.

Then, Constellation launched Gaymers Original in the over-ice category last year. Between 2005 and 2006, the three brands poured around [pound]80m into cider advertising.

The boom has been hailed a success for British business at a time when consumers are concerned about provenance. The drink is perceived as healthier than beer and it clocks up considerably fewer food miles.

John Mills, the managing director of Gaymers, says: "All our apples come from long-term contracts of around 30 years with the orchards, mainly in Somerset. It means apple farmers can get on and plant the trees knowing they have a buyer."

S&N delivers interim results on Tuesday and all eyes will be on the extent to which weather has hit cold, or over-ice sales.

John Hutson, the chief executive of JD Wetherspoon, says there's little sign of a

cider dip at his pub chain. "We stock Magners, Bulmers and perry brands. Over the two years, demand is up over 50 per cent. I think C&C is feeling the pressure as everyone joins in. It's not the end of a boom."

A competitor to C&C says S&N has been aggressively discounting Bulmers Original to the trade. "It is cheaper than Magners and it has hit C&C's trading. S& N is a massive machine to take on. It has some serious sales clout." Mr Pratt has said firmly he has no plans to drop the price of Magners in response.

City analysts maintain that Magners has a strong brand and will bounce back to some extent, although jitters remain about the robustness of the cider revolution. Andy Blain at investment bank Shore Capital says new products and brand extensions such as Iced and Light versions of Magners are expected, but he adds that the "momentum of the booming market has been lost".

Simon Mosey, the marketing manager for cider at S&N, says there is more to be done as the sector still accounts for only 8 per cent of total alcoholic drinks by volume.

If celebrity drinkers are any indication of future trends, a Babycham revival may not be out of the question. On the back of the cider boom, perry has been converting drinkers.