The future bodes well for spirits companies, according to an analyst, although brewers will find 2008 tough going as commodity prices remain high.

In a note to clients today (14 January), Dresdner Kleinwort reviewed its coverage of several drinks companies, claiming that valuations for beer companies are full and already discount ongoing cost savings initiatives.

The analyst subsequently lowered its coverage of SABMiller to 'hold' from 'add' and InBev to 'hold' from 'buy'. With raw material costs remaining high, the risk to forecasts from brewers is on the downside, Dresdner Kleinwort noted.

Spirits companies are well-placed in 2008, the bank added, as they have limited exposure to raw material inflation, pricing power is more robust and demand remains resilient. Campari and C&C Group have seen their ratings upped to 'buy' from 'reduce', while Diageo was upgraded to 'buy' from 'hold'.