Brewers report disappointing first quarters

Oliver Smith
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CARLSBERG and Anheuser-Busch InBev both reported disappointing results yesterday as Carlsberg cut its earnings forecast on the back of political tensions in eastern Europe while AB InBev reported a 24 per cent drop in net profit due to increased marketing spend on the World Cup.

Carlsberg, the maker of Tuborg and Kronenbourg 1664, is the market leader in Russia, but said it is suffering from a slowing Russian economy and a law banning the sale of alcohol from street kiosks. The combined factors led to an eight per cent slump in the Russian beer market last year.

Carlsberg now expects the Russian market to decline by mid-single-digit percentages in beer volume in 2014. Sales dropped 14 per cent in eastern Europe in the first quarter, a little more than analysts expected.

“The western European business continued its strong performance while results in eastern Europe were impacted by the uncertain macro situation,” said Carlsberg chief executive Jorgen Buhl Rasmussen.

InBev, which sold more than one in five beers drunk worldwide last year, said its net profit of $1.4bn (£825m) in the first quarter had been hit by marketing costs that had grown 17 per cent ahead of the World Cup in Brazil.

The world's largest beer maker saw revenues grow by 8.9 per cent during the quarter to £10.6bn and beer sales increase in every region except Europe.

US brewer Molson Coors, on the other hand, reported a surge in first quarter profit after it received a $52.5m benefit from terminating a joint venture with Modelo early.

Molson Coors reported a profit of $163.4m up from $28.5m a year earlier.