Bear Stearns has downgraded its rating for Anheuser-Busch and questioned the brewer's price-cutting policy. The analyst shifted its recommendation on the company to 'underperform' from 'peer perform' yesterday (21 July) and said that it is "highly sceptical of the company's aggressive price discount strategy."

Following a tour of beer markets in Texas and Florida, Bear Stearn's Carlos Laboy said: "We are not convinced that AB's initiatives will provide adequate revenue lift, support EPS expectations, or correct the domestic beer category's image problems.

"We are unconvinced that undercutting AB's long-held price advantage over Miller is working or is in any domestic brewer's long-term interest," Laboy added.

Bear Stearns has also lowered its earnings forecast for the brewer for Q2 to 81 cents per share from 82 cents, its fiscal 2005 forecast to US$2.73 from US$2.75 and its 2006 forecast to US$2.84 from US$2.90.