SABMiller, Home Of Fosters And Peroni, Reports Lager Consumption Is Up By 9%

Why Are Lager Sales Going Up?

Lager sales volumes in Europe improved by 9% for SABMiller, driven by selective price reductions and growth in the sector.

The British owner of Pilsner Urquell, Fosters and Kozel lagers also said the Italian beer brand Peroni had helped it buck a declining UK beer market, with SABMiller sales rising 5% in the six months to 30 September, compared to a market decline of 4.6%.

Equity analyst for Charles Stanley Sam Hart told Huffington Post UK that sales of Peroni had been strong in the UK for the last three years because of an aggressive marketing programme.

This was combined with other measures such as making it easier to distribute by putting it into more pubs and restaurants, and offering more marketing around the brand - such as branded fridges and prominent beer taps - to make the brand "very successful".

Globally, SABMiller, which is the world's second largest brewer and a FTSE100 company, chalked up a 11% increase in revenue to £10.9 billion and profit before tax up 12% to £1.7bn.

The full report also highlighted that last year's acquisition of Fosters lager had significantly contributed to the group's successful half-year.

Charles Stanley's Hart told Huff Post the growing trend for lager in the emerging markets was behind the continued fortunes of brewers.

"The UK lager market is a relatively small proportion of SABMiller's portfolio, it maybe makes up less than 5% of its beer volumes," he said.

"In the emerging markets the beer volumes are increasing, particularly in Latin American and Asia, as people move away from informal hooch-type alcohol towards branded alcohol. There's also a certain cache that goes with drinking branded beer."

By contrast, beer sales in the developed world, including the US and Europe, was on the decline, although SAB Miller's volumes looked better than some of its rivals.

Globally, soft drinks volumes also rose by 6% and other alcoholic beverages were up by 12%.

However, currency movements had an adverse impact of six percentage points on group revenue growth principally due to the weakening of the South African rand and Central European currencies.

Elsewhere, new brewing capacity has been commissioned in South Sudan and Nigeria and new capacity in Ghana, Tanzania, Peru, Uganda and Zambia is currently under construction.

UK brewers are celebrating too - Young & Co pub business announced a 10.7% rise in revenue to £100 million, with pre-tax profits up 11.2% to £13.8m.

And in some rare good news for the pub trade, Young revealed it had opened two new pubs and reopened two large redevelopments – with another set to re-open before Christmas.

Stephen Goodyear, chief executive of Young’s, said the positive figures reflected the extraordinary events of the Jubilee and the Olympics, in spite of the awful wet summer Britain had endured.

“Despite continued caution on the part of the consumer, I believe we are well positioned to continue to generate profitable growth and therefore attractive returns for our shareholders," he said.

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