Asahi Breweries has warned that sales this year will be lower than 2007, as raw material costs lead to price rises.

The Japanese company said earlier this week that volume sales in 2008 should come in 1.8% down on expected sales this year.

Higher raw material costs have prompted Asahi and other food and beverage makers to hike their product prices this year, raising concerns about the potential impact on sales.

Overall beer demand in 2008 will fall by between 3% and 4%, with the price increases due to begin in March, the company said.

Asahi president Hitoshi Ogita was cited in local reports as saying: "We can expect wide fluctuation in demand in the first half of this year."

The company said that higher costs of raw materials such as imported malt, aluminium and cardboard have also led to an increase in retail prices by 3%-5%.