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SABMiller volumes slip on global slowdown

World number two brewer SABMiller saw beer volumes dip slightly as forecast in the six months to September as the global slowdown continued to hit demand, with declines in Europe offset by double-digit growth in China.

The London-based maker of Miller Lite, Peroni and Grolsch said in a statement on Thursday that half-year underlying volumes fell 1% with a 12% rise in China cushioning falls Europe, Latin America and South Africa.

Most forecasts in a poll of analysts by Reuters ranged from flat to a 1% decline as the brewer’s sales continued to suffer from price rises pushed through to offset sharp rises in commodity costs such as barley, glass and aluminium.

The second-ranked brewer behind Anheuser-Busch InBev said its financial performance was in line with its own expectations, and that revenue was supported by the price rises taken in its previous financial year.

SABMiller shares were off 0,7% at £16,18 by 7.20am GMT after a strong run over the last few weeks.

”A slightly disappointing volume performance in H1 with volumes off 1%. This implies down 2% in Q2, a deterioration on the flat performance in Q1,” said analyst Matthew Webb at broker Cazenove.

But he left his earnings forecasts unchanged for the year to March 2010, noting that the potential to acquire FEMSA Cerveza at an attractive price was a positive for the shares.

The brewer, which earns nearly 90% of its profits from emerging markets like South Africa, Colombia, Poland and China, is seen by analysts as the front-runner to buy Mexico’s second biggest brewer FEMSA Cerveza, maker of Sol and Tecate beers, for about $7,5-billion.

Elsewhere in the sector, AB Inbev said on Thursday it had agreed to sell breweries in nine eastern European countries to CVC Capital Partners for an initial $2,23-billion, passing its target for divestments since its merger a year ago.

SABMiller, which also brews Castle, Snow, and Pilsner Urquell beers, said beer volumes dipped 1% in Latin America, fell 6% in Europe and slipped 3% in South Africa, while Asian volumes rose 9% boosted by strong growth in China and its Africa region was up 3%.

In the United States, where it formed the MillerCoors joint venture in July 2008, sales to retailers were off 1% in the half-year with both key brands Miller Lite and Coors Light seeing volumes down.

The group was giving a first-half trading update ahead of its half-year results on November 19. – Reuters

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