Insight - Beer market to remain weak - MillerCoors
There is unlikely to be an upturn on the US beer market for the rest of 2009, according to MillerCoors, adding that it plans to raise beer prices in the autumn.
The US beer market shrank by around 1% in volume terms for the first six months of 2009, said MillerCoors today (03 August).
"We don't see any particular reason why the trend will change. We're looking at a category likely to be down 1% this year and hope we can see some progress as we head into 2010," said CEO Leo Kiely.
MillerCoors, which is the US joint venture between SABMiller and Molson Coors, today reported a 2% rise in net sales for the six months to 30 June, despite a slip in volume sales. Earnings jumped by nearly two thirds, to US$510.9m, compared to the equivalent period a year earlier.
Kiely said that MillerCoors plans to raise beer prices in the autumn. "Pricing is trailing our costing. We are seeking to get a very moderate price increase, in-line with our cost of goods increases, this fall," he said.
Revenue per case rose by 3% in the second quarter, according to MillerCoors figures, but cost of goods rose by around 5%.
Chief financial officer Gavin Hattersley said the brewer expects lower cost rises in the second half, potentially below 2.5%.
Beer sales in the US have been particularly badly hit in the on-trade, which has seen more consumers switch to drinking at home in the recession, said MillerCoors. It added that there has been "a little bit of trading down between our premium and economy portfolio".
Volume sales of Italian lager Peroni Nastro Azzurro were flat for the second quarter, due to a "very tough" import market, the group said.
Sales to retailers of MillerCoors' six "focus brands" rose by 1.3% for the quarter, however, driven by MGD 64 and Coors Light.
On synergies from the combining of the Miller and Coors businesses, Kiely said: "We are more confident than ever that we can nail the synergies commitment on time."
MillerCoors has delivered $110m in synergies and expects to achieve $260m of cumulative synergies by the end of calendar 2009, surpassing its original commitment of $225m for the year. The group expects to achieve total synergies of $500m by the end of its third year of operations.
United Breweries looks likely to have taken share off rivals on the Indian beer market after reporting strong rises in profits and sales for its fiscal third quarter....
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