Molson to sit tight on acquisitions

Molson to sit tight on acquisitions

Molson Coors' CEO, Peter Swinburn, does not believe that the brewer should rush into acquisitions in new markets to offset shrinking beer sales volumes in the US, UK and Canada.

Swinburn said that Molson Coors' performance in 2009 was "affected by weak volumes across all markets".

The Canada-based brewer today (9 February) reported beer volume sales down 3% for the year, compared to 2008. Sales slipped to US$3bn, from $4.7bn in the previous year.

While Molson predicted that beer demand in its key markets of US, UK and Canada is set to remain "sluggish" in 2010, it sees no need to speed up exposure to new markets via acquisitions at present.

"Our belief is that we can still work the business that we've got pretty effectively," Swinburn told analysts in a results conference call today.

Despite labelling the US as "one of the toughest beer markets in decades", Swinburn said that Molson will not go for a "heavy investment" in a market where it does not have the right expertise.

However, he left the door ajar for the future by adding: "We're building that skillset inernally, but we're not there yet."

Molson Coors has been repeatedly linked with a move for Foster's beer business in Australia. It has built up a stake of around 5% in Foster's Group, via a third party investor.

Swinburn told analysts today that Molson is already investing to build its brands, particularly Coors Light, in new markets.

The brewer's international markets business grew volume sales by more than 14% in the fourth quarter, albeit from a small base, driven by sales in China, Europe and Latin America.

Molson reported underlying net profits up 41% for the 52 weeks to 26 December, although pre-tax profits slipped 3% for the final three months, compared to the prior year. The group's share price slipped by 3% on the New York Stock Exchange in morning trading.