The US brewer Anheuser-Busch Cos has reported first quarter 2005 domestic beer volumes below previous expectations.

"The company has stepped up its new product, packaging and marketing efforts, but it will take time for these new initiatives to gain traction," said Anheuser-Busch Cos., Inc., president and CEO, Patrick T. Stokes.

"Given Anheuser-Busch's substantial competitive strengths in the US beer market, we are confident the company will successfully restore its volume momentum."

Domestic beer sales-to-wholesalers decreased 2.7% for the first quarter 2005 versus the first quarter 2004 to 24.4m barrels. Wholesaler inventories at the end of the quarter were about one-and-one-half days higher than at the end of the first quarter last year, representing a reduction of approximately one day versus the differential at the end of last year.
Domestic beer wholesaler sales-to-retailers were down 1% in the first quarter on a comparable selling day basis, due to generally weak industry volume conditions and the comparison with the strong performance of Michelob ULTRA in the prior year, the company said.

The company expects first quarter 2005 earnings per share of US$0.63 to US$0.64, excluding a one-time gain on the sale of the company's equity interest in a Spanish theme park, versus US$0.66 per share on a comparable normalised basis in the first quarter 2004.

"This decline reflects the lower beer sales volume of the domestic beer company, coupled with commodity cost pressures and the incremental costs to support the company's stepped up marketing and sales efforts. Management believes that earnings per share growth in the low-single digit range for the full year 2005 (before stock option expense and one- time items in both years) is a reasonable expectation at this time," a statement said.

Anheuser-Busch will release worldwide beer volume and consolidated earnings results for the first quarter on April 27, 2005.