Prices up, sales down for world’s biggest brewer

11/08/11 17:12 CET

corporate

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Anheuser-Busch InBev is warned of challenging times in its biggest market, the United States. The world’s largest brewer said it is not sure it if can keep raising prices in the face of sluggish sales.

The firm, which is best known for Budweiser and Stella Artois, met its second-quarter profit forecasts. It did that by passing on higher raw material prices to customers but in that time US sales dipped 3.4 percent.

The company was more positive for its second biggest market Brazil where it expects beer volumes to recover in the second half after a dip in the second quarter.

“The US has been a more challenging market, we are monitoring what is going on with the economy and the politics, but we remain focused on the things we can control,” said Chief Financial Officer Felipe Dutra, noting poor weather and higher fuel prices contributed to the fall in volumes.

Other food and drink companies have pushed through price increases to offset big hikes in commodity costs, but analysts doubt if these big rises can continue while many world economies remain sluggish, particularly the US and Europe.

Second-quarter core profits or EBITDA (earnings before interest, tax, depreciation and amortisation) increased by six percent to $3.75 billion (2.6 billion euros).

More about: Alcohol, Economy, USA

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