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FMCG News South Africa

SABMiller lager volumes up 3%

Global brewing giant SABMiller Plc on Tuesday reported 3% growth in lager volumes with organic lager volumes marginally ahead of the prior year (up 1% in the second quarter) for the six months ended September.

This reflects a high comparable (organic lager growth of 9%) and moderating consumer demand in many markets.

Group revenue growth has been assisted by firm pricing, with revenue per hl at constant exchange rates growing in excess of 5%, and this has continued to offset the impact of higher input costs, the group said in a trading update.

Volume growth is shown using the group's new definition which aligns the basis of reported volume growth with that of group revenue and EBITA.

The calculation of the organic growth rates excludes volumes for acquired businesses for the first 12 months after an acquisition.

The group said its financial performance for the first half was in line with the group's expectations, benefiting from generally favourable exchange rates when compared with the prior year, whilst on an underlying basis slower volumes have constrained profit growth.

Deteriorating global economic conditions, weakening consumer demand and volatile exchange rates make the prospects for the rest of the financial year increasingly uncertain, the group added.

In South Africa, lager volumes were 1% below the prior year with sales stronger in the second quarter. Soft drink volumes grew 2%. The market overall continued to be affected by softer consumer demand.

"As previously reported, ongoing cost inflation and currency weakness have impacted financial performance," the group added.

In Europe lager volume growth on an organic basis was 2%, following strong growth in the prior year (12%). Poland achieved organic domestic volume growth of 4% and continued to increase market share.

Romania volumes also outperformed the market, growing 24%, driven by the Timisoreana and Ursus brands.

Organic volumes in Russia were 4% down, impacted by the effect of sustained high inflation on consumer demand and de-stocking of wholesale inventories towards the end of the period.

Czech Republic domestic volumes declined by 5%, but the trend has improved in recent months in response to trade and marketing initiatives.

In the first quarter of the financial year Miller's Brewing Company's US domestic volume sales to retailers (STRs) decreased by 2.0% compared to the prior year.

The Miller Brewing Company and the Coors Brewing Company combined their US and Puerto Rico operations with effect from 1 July 2008 to form MillerCoors.

In the three months to 30 September, MillerCoors' domestic US volume STRs grew by 0.7% on a trading day adjusted basis when compared to pro forma combined STRs in the comparable period of the prior year. Coors Light brand volumes increased 6.8%, whilst Miller Lite decreased 3.6%.

The craft and import portfolio volumes rose 5.0%, Keystone Light posted double digit gains and both Coors Banquet and Miller High Life continued to generate good growth.

Miller Chill volumes declined significantly with aggressive competition in the segment.

The Africa and Asia business reported that organic lager volumes increased 2%. China organic volumes were flat, although growth of 4% was achieved in the second quarter despite the continued impact of significant beer industry price increases.

In Africa, lager volumes grew by 11% on an organic basis, following good growth in the prior year (8%), with strong growth across the region, particularly in Tanzania.

In Latin America, lager volumes grew by 3%. Lager volumes in Colombia were 3% below the prior year, showing some improvement in the trend recently, although high consumer lending rates have continued to inhibit consumer demand.

In Peru, lager volumes were 10% ahead of the prior year, reflecting a robust trading environment and strong local execution.

SABMiller's business in Ecuador continued to deliver strong performance with 14% lager volume growth, as the market continued to respond to the reinvigoration of the brand portfolio and route to market.

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