Andy Morton

Analysis - US job losses hit Europe's brewers

By | 14 May 2013

Beer volumes dropped in the US

Beer volumes dropped in the US

Europe's big brewers saw their volumes in the US drop back in the first three months of the year as unemployment among young men hurt sales, an analyst has said.

Bernstein analyst Trevor Stirling said in a note today (14 May) the US beer market had a “very weak” Q1 after 2012's strong performance. Bad weather was partly to blame for industry volumes falling about 3%, but increasing job losses in beer's key demographic was an underlying cause, Stirling said.

He also said consumer confidence is fragile, damaged by higher payroll taxes.

In Heineken's Q1 results, released last month, group beer volumes in the Americas declined by 2.4% with sales to US retailers declining in the low-single digits. Over the same period, Anheuser-Busch InBev saw US sales-to-wholesalers fall by 5.2%.

The note, part of Bernstein's quarterly sector review of the European alcohol industry, said despite economic problems, margins in the US remained strong because of growth in craft beer and “premium” sales.

Stirling said a “marked slowdown” in Cognac and Scotch sales in China in the first-quarter caused by a crackdown on conspicuous consumption at government events is likely to lessen throughout the year. 

In Q1 figures released in April, Rémy Cointreau admitted “more modest” growth for its Cognac labels in China, while in a call with analysts today, Diageo's Asia-Pacific head warned that the country's sales will remain “soft” for the rest of the year.

China's beer volumes, however, rebounded in the first three months of the year, though margins remained small, Stirling said.

Expert analysis

Global Beer Tax Tables, 2012

This report covers 58 markets and comprises a series of tables covering taxation base, historical excise rates, legal controls and a calculation of the total taxation burden on beer.

Sectors: Beer & cider, Company results, Emerging markets – BRIC, Spirits

Companies: Heineken, Anheuser-Busch InBev, Cointreau, Diageo

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