Anheuser-Busch InBev, the world's largest brewer, warned of challenging times in its biggest market of the United States after beer prices rises there and in Brazil helped it meet second-quarter profit forecasts.
The brewer of Budweiser and Stella Artois said it was monitoring the US economy closely, but 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.
Chief financial officer Felipe Dutra said that he remained cautious on the United States, saying he was watching the economy closely after quarterly beer volumes there dipped 3.4 per cent due to poor weather and higher fuel prices.
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 6 per cent to $3.75 billion.
In Brazil, beer volumes fell 2.6 per cent due to low growth of disposable income, and because of tough comparisons with last year which was boosted by the football World Cup.
"We are confident the slowdown is temporary," Mr Dutra told reporters. "We see a significant increase in real terms for minimum wages...this has an impact on disposable income and therefore consumption as we approach the year end."
Worries over rising unemployment and stagnant wages pushed US consumer sentiment to a two-year low in July, while in Brazil consumer sentiment also reached a two-year low in June due to concerns over inflation.
Miller Coors, the second-largest brewer in the United States, owned by SABMiller Plc and Molson Coors , also said earlier this month that it managed to increase profit in the second quarter by raising beer prices and cutting costs in the face of a tough market.
AB InBev stuck to its forecast that costs savings from its takeover of Anheuser-Busch in 2008 would total $2.25 billion by the end of 2011.
Reuters