AB InBev sees beer sales rise despite tax increase

The world's biggest beer maker – created by a mega-merger in 2008 – grew UK volumes by 1.3 per cent in the first quarter of 2010 against a 3.5 per cent decline for the wider industry, figures yesterday revealed.

The solid performance from the group behind Budweiser and Stella Artois came despite a March Budget which hiked beer duties by 2 per cent above inflation, with similar rises in the pipeline until 2015.

But the Budweiser brand – official beer sponsor of next month's World Cup – saw UK volumes rise 40 per cent on the back of marketing and promotions, AB InBev UK president Stuart MacFarlane said.

The sales boost was "a glimpse of what's to come" from the impact of the looming tournament in South Africa, he added.

Across the wider group, AB InBev is also hoping for a World Cup lift for several of its other brands, with local sponsorship deals including Brahma in Brazil, and Jupiler in the Netherlands and Belgium.

Beer volumes across the business edged up 0.8 per cent – mostly driven by China, Brazil and Canada – although revenues grew more strongly at 1.9 per cent as the group focused on premium brands and pushed through price hikes to offset cost pressures.

Underlying earnings rose 5 per cent to $3.1 billion (2bn), helped by cost savings of $130 million resulting from the merger.

The group said it had gained market share in almost half of the markets in which it operates, but added that it was "not satisfied" with its overall market share performance.

It blamed some of the declines in other markets on very tough comparisons in the United States as well as "opportunistic promotional activity by some competitors".

Gerard Rijk, an analyst at ING, highlighted the strong performance in Brazil, describing it as "amazingly strong".