Beer volumes to remain flat this year

SABMiller, the world's second-largest brewer, said yesterday that beer sales fell 1percent in the first half of its financial year.

Beer volumes were down 3percent in South Africa in the six months ended September, and market share declined marginally during the period, which some analysts say was the biggest negative in the trading update.

Reduced consumer spending and lower sales in Western Cape - due to restrictions on the sale of alcoholic beverages - continue to weigh on the group.

A strong performance in China, where volumes grew 12percent, was offset by the group's weakest performance, which was in Europe, where beer volumes were down 6percent.

The group's European operations are focused on Central and Eastern Europe, which experienced strong growth until the economic downturn, and have been hit harder than most regions since then.

Africa was among the more resilient markets along with Asia, and volumes rose 3percent and 9percent respectively.

The brewer continues to deal with price increases driven by rises in commodity costs such as glass, aluminium and barley.

The volumes calculated were on an organic basis and exclude the effects of acquisitions and disposals.

The group said in the update that the financial performance was in line with its expectations.

Soft drinks volumes were 1percent higher for the group, though volumes were down 2percent in South Africa, in line with the market.

SABMiller earns nearly 90percent of its profits from emerging markets like South Africa, Poland and China.

SABMiller chief executive Graham Mackay has stated that beer volumes would remain flat in the current year.