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US: Weak beer market weighs on MillerCoors in Q3

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  • Volume sales continue to slide 
  • Profits jump on synergies
  • Cost savings drive performance

Weak consumer demand for beer in the US weighed on MillerCoors in the third quarter of 2010, but cost savings boosted profits for the SABMiller and Molson Coors-owned brewer.

MillerCoors saw beer volume sales fall for the three months to the end of September by 2.7% to to 17.9m barrels compared to the same period of 2009 and by 3.76% on Q3 2008, it said today (3 November).

Lower excise taxes and lower costs helped the US-based brewer to eke out a 0.3% increase in net sales for the quarter, to $2.015bn. MillerCoors' sales performance underlines the ongoing weakness on the US beer market and has forced the firm to focus more greatly on cost savings.

The brewer achieved $83m in synergies during the quarter. The brewer said that $56m of this was part of the planned integration of SABMiller and Molson Coors operations in the US, but a further $27m of "additional cost savings" was achieved by cutting media, transport and raw materials spend.

Savings boosted profits for the Miller Genuine Draft brewer, which is 58%-owned by SABMiller and 42%-owned by Molson Coors. Operating profits leapt by 38% to $320.8m for the quarter, while net profits jumped by 36% to $313m.

MillerCoors' CEO, Leo Kiely, said that he saw reasons for optimism in the brewer's sales performance. "It is still a tough market environment, but we are encouraged by our recent premium light trends and the continued strong momentum of our Tenth and Blake portfolio,” he said.

Coors Light and Miller Lite lager volumes fell by low single-digits for the quarter, while MGD 64 fell by double-digits. 

For the first nine months of 2010, the brewer's net sales were flat, slipping by 0.2% to $5.85bn. Net profits jumped by 23% to $912.8m.

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