World's Largest Beer Maker Reports Slumping Sales August 4, 2008
News Summary
A combination of a weak U.S. economy and higher prices and sluggish demand in other countries has resulted in slow first-quarter sales for SABMiller PLC, the world's largest beer maker by volume, the Wall Street Journal reported Aug. 1.
Worldwide shipments for the London-based company decreased by 1.6 percent in the quarter ended June 30, after the company had experienced a 13 percent increase in the same period a year ago. Even in traditional stronghold areas for sales, such as the U.S. Midwest, a slowdown in spending has hurt the brewer of Miller Lite and other brands. Sales volume at the company's U.S. arm is down 2 percent, including a 1.6 percent drop in sales for the Miller Lite brand.
Industry experts say SABMiller may be less able to withstand the effects of an economic slowdown because its "economy brands" are not as popular as those of rival Anheuser Busch. Benj Steinman, editor of the newsletter Beer Marketer's Insights, said Anheuser Busch brands such as Busch Light and Natural Light tend to carry more appeal than SABMiller's economy brands, such as Milwaukee's Best Light.
Higher costs of raw materials such as barley are forcing beer makers in general to raise prices, and that is contributing to a slowdown in demand in countries such as the Czech Republic and Colombia. Sales volume in those two countries is down 10 percent and 4 percent, respectively.
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