USA: Analysts Warn Of Falling Pricing Power Of Beverage Companies
Beverage analysts are warning of a loss in pricing power for the world's major drinks companies as the effects of the US economic slowdown kicks in.
A report out Monday by equity analyst WestLB Panmure said that weak pricing momentum had already affected the results of companies with high exposure to the US.
The analyst said: "There is evidence to suggest that pricing power in both beers and spirits has waned significantly during 2001. Our surveys of key markets in the US, UK France, Spain, Eire and New Zealand displayed weak pricing strength across the board for all but the UK on-trade and US spirits."
The problem is exacerbated in the premium segment, where pricing strength has "fallen further than mainstream spirits."
WestLB cited Brown Forman's recent drop in its estimates for first quarter earnings per share, which were brought down 9%, as evidence of the trend. Brown Forman, which is 81% exposed to the US cited the US downturn and a strong dollar as the causes for the fall.
By comparison Pernod Ricard, which has less exposure in the US and a more mid-scale portfolio, saw first half volume growth of 12.4%.
The US consumer goods group Fortune Brands has confirmed it is in talks about launching a joint bid with Pernod Ricard for Allied Domecq....
Diageo is to launch a new global advertising campaign for Smirnoff Ice. The first ad in the global campaign, 'Garden', launches in Great Britain on April 11th on terrestrial and satellite TV. ...
Pernod Ricard is looking to acquire Allied Domecq....
Allied Domecq and Pernod Ricard have both been downgraded....
Diageo has completed another share buyback transaction....
Fortune Brands has started making moves to acquire in the European drinks industry, according to press reports....
E&J Gallo has announced a number of appointments within its European division....
Diageo's Smirnoff Signatures line of premixed cocktails is now available nationwide in the US....
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