AB InBev offets weakness with price hike

Anheuser-Busch InBev, the world's largest brewer, lifted core profit in the second quarter as price rises compensated for weak beer sales in its main markets of the United States and Brazil.

The maker of Stella Artois and Budweiser said on Thursday that in the United States shipments of its own beer fell 1.7 per cent, while sales to retailers fell 3.4 per cent, hit by the impact of the bad weather and by high petrol prices.

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 soccer World Cup.

Its normalised EBITDA (earnings before interest, tax, depreciation and amortisation) increased by six per cent to $3.747 billion, while total volumes grew 0.3 percent.

That compares with an EBITDA of $3.7bn, and flat beer volumes expected by 15 banks and brokerages polled by Reuters.

AB InBev sells roughly three-quarters of its beer in the Americas, and around 40 per cent of its total beer sales come from Latin America.

Worries over rising unemployment and stagnant wages pushed U.S. 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 and Molson Coors Brewing Co , 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.