Profits of those brewer operating in the US market could be hit on two fronts, a bank has warned. A price war is looming in the US market according to a research note from Citigroup Smith Barney, and, consumers may be starting to trade down from premium beers.

The investment bank has said it surveyed beer wholesalers who own 69 warehouses and distribute to just under 100,000 retail locations across the US. The responses from the wholesalers paint a worrying picture for the brewing sector in the country.

Some 82% of respondents said they agreed with Citigroup's predictions of a price war, the bank's analyst Bonnie Herzog said in a research note.

On average the wholesalers believe a price war could last at least seven months, she added.

Despite the possibility of a rise in volumes, Herzog said that she fears a price war will reduce the brewers' profits. She said: "Furthermore, these things typically play out over several quarters and don't just 'magically' stop, restoring profitability."

The survey also seemed to demonstrate evidence of consumers trading down, which could also hurt profits. The research note added that 69% of the wholesalers "have seen more growth" in sub-premium brands compared with a year ago. Furthermore, 80% of respondents said they "saw an increase in marketing and promotions behind these brands during the second quarter," Herzog said.