NEWS
ABINBEV PROFITS HALTED BY SLOWDOWNS IN CHINA AND USA
By Siulan Law Mathews DipWSET
25-10-2019
Budweiser owner Anheuser-Busch InBev (ABInbev), the world’s largest brewer, lowered its full year earnings forecast due to poor third quarter performance in China and USA.
The Belgium-based company said in its third quarter statement released today that core profit was unchanged year-on-year, missing market expectations for a 3% rise.
ABInbev said sales volume in China declined by 5.9% in third quarter, a month after it raised USD5.8 billion by listing its Asian unit Budweiser Brewing Company APAC in Hong Kong.
The weak performance in China raised concerns that the brewing giant’s earnings will be severely affected by the slowest economic growth seen in China in 30 years.
In USA, the company said that the emergence of hard seltzers, an alcoholic drink fermented from sugar instead of malt barley, is eroding consumption of beer, revenue in third quarter managed to rise by just 0.2%.
ABInbev said they are expanding in that segment with brands such as Bon & Viv and an upcoming Bud Light Seltzer.
In South Korea and Brazil, sales volumes are also in decline due to price increases as a result of higher raw material costs and adverse currency swings.
Though Middle America reported sales growth of 4.7%, the market is too small to off-set the declines seen in other regions.
(the writer can be contacted at: SLawMathews@thewinechronicle.com)
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