Boston Beer Co, the US brewer, has reported a loss in its third quarter, due to a hefty product recall and rising costs.

Boston Beer said today (5 November) that it had recorded a net loss of US$295,000 in the three months ended 29 September, compared to a profit of $3.2m in the same period last year.

Net income for the first nine months of 2008 has also sunk to $4.5m, down from $15.7m last year, prompting the group to cut earnings estimates. 

Rising production costs were largely to blame for a loss in the third quarter, but a product recall enacted in April was the main reason for the profit nose-dive over the nine-month period, Boston said.

Boston Beer issued a voluntary recall of certain glass bottles of Samuel Adams beer in April. "In our first six months of financial results, we took various charges for this recall," said Martin Roper, company president and CEO.

He added that the recall also resulted in a one-off charge of $1.2m in the third quarter. Total product recall costs totalled $22.9m, the firm said.

The company estimated that it has quarantined for destruction approximately 990,000 cases of product related to the recall, of which 200,000 cases were held at its warehouses and identified prior to shipment to its wholesalers.

To reflect the current known estimated impact of this recall, the company said it had reversed approximately 790,000 cases of shipments in the first nine months of 2008.

Volumes for the third quarter rose 6% to 501,000 cases, after substracting recalled products, Boston Beer said.