MILWAUKEE—SABMiller saw North American sales of key brands like Miller Lite fall 2 percent in its first quarter and worldwide consumption drop as consumers pulled back on spending in some countries, the brewer said Thursday.
The London-based company, parent of Miller brands in North America, said worldwide lager consumption fell 1.6 percent from existing businesses in the three-month period ending in June.
In North America, Miller’s sales to retailers of its flagship Miller Lite were down 1.6 percent, while sales of Miller High Life were up less than 1 percent. The company said in its trading statement that Milwaukee’s Best sales fell 5.5 percent while sales of its higher-priced brands like Miller Chill, Leinenkugel’s and Peroni Nastro Azzurro, were up 8.1 percent.
Chief Executive Graham Mackay said the worldwide decline compared with 13 percent growth in the same period in 2007.
The current period saw lower sales in China and “the moderation of consumer spending in some markets,” Mackay said in a statement.
If the company’s newly acquired businesses are included in its results, the group would have posted 1.5 percent growth in lager sales in the period, SABMiller said.
In the latest quarter, sales in China were down 5 percent, largely affected by the Sichuan earthquake on May 12 which killed nearly 70,000 people. The quarter also marked consumer price inflation and higher beer industry prices. In the previous year, sales had grown in China by 25 percent.
In South Africa, lager sales fell 3 percent on soft consumer demand, a drop from the 4 percent rise the company saw in the prior-year period. Retail sales were under pressure because of higher interest rates and increasing food and energy costs.
In Europe, lager volume grew 1 percent, though countries like Russia and the Czech Republic posted declines, of 2 percent and 10 percent, respectively.
In North America, Miller began operating as MillerCoors LLC at the end of the quarter, as part of a joint venture with Molson Coors Brewing Co., the brewer of Coors Light. The pairing aims to better compete with U.S. industry leader Anheuser-Busch Cos. Inc.
The industry is seeing consolidation as brewers grapple with rising costs for ingredients, like grains and hops, and fuel.
Anheuser-Busch, the maker of Bud Light and Budweiser, recently accepted a $52 billion buyout from Belgian brewer InBev SA, the maker of brands such as Stella Artois and Beck’s.
Brewers are trying to boost prices to make up for their higher expenses. SABMiller said pricing remained strong in the quarter and Anheuser-Busch just announced it will increase prices an average of 4 percent across the bulk of its volume starting in September.
Prices and input costs are rising as the industry is seeing flat to negative growth.
St. Louis-based Anheuser-Busch, which controls just under half the U.S. market, said U.S. shipments to wholesalers rose 0.5 percent in its quarter ending in June, while sales to retailers rose 0.4 percent.
But international volume, which includes Anheuser-Busch brands brewed overseas and exports, rose 4.8 percent on increased volumes in China, Canada and Argentina. Worldwide volume, which includes domestic and international, gained 1.2 percent for the quarter.
SABMiller’s shares fell 4 percent to 1,059 pence ($20.97) on the London Stock Exchange.
