Brewing giant SABMiller today posted an 18% rise in pre-tax profits but warned a fierce price war in the United States continued to water down demand for Miller lager.
SABMiller, which also makes Peroni and Pilsner Urquell, said revenues lifted 19% for the year to March 31 helped by its takeover of Colombian brewer Bavaria in October, which has given it a new growth platform in South America.
The London-based group said Europe delivered an excellent performance, driven by demand in Poland, Russia and Romania, but sales in South Africa were hit in the second half due to cooler weather and slower wage growth.
The rising costs of aluminium used for canned drinks and soaring energy bills were also affecting profits, while group lager volumes were squeezed by falling sales of Miller to retailers in the United States, where a fierce price war has been waging since last summer.
Shares were 4% down today, off 39p to 1055p.
Budweiser owner Anheuser-Busch went on the attack last year by cutting prices and hiking the amount of money it spends on marketing its beer brands. The merger of Coors and Molson also turned up the competitive heat across the Atlantic.
However, chief executive Meyer Kahn said the company has concluded its three-year turnaround programme in the US and its reshape would ensure it was a “more able and vigorous competitor in the US market”.
Commenting on the group’s performance, he said: “This was another year of good growth in volumes, margins and earnings reflecting the growth profile that the group has built over the years.”
Looking ahead, SABMiller’s global footprint and portfolio of businesses leave it will positioned to make further progress in the coming year, he added.
Listed on both the London and Johannesburg stock exchanges, SABMiller has 42,000 employees.
Outside the United States, the company is one of the largest bottlers of Coca-Cola products in the world.