Bad weather in China contributes to flat SABMiller volumes

Shares in SABMiller fell almost 3 per cent in early trading on Tuesday morning after the brewer unveiled its third quarter results for the three months ending 31 December. While soft drink volumes grew 2 per cent in the quarter on an organic basis, beer volumes remained flat compared to last year.

Tentative recovery ​

The brewer of brands like Grolsch, Castle Lager and Pilsner Urquell said the results revealed some “tentative signs of recovery” but the mixed picture was not good enough to convince the market.

In Europe sluggish demand contributed to a 2 per cent decline in beer volumes and in South Africa, which accounts for around a sixth of company revenue, beer volume dropped 4 per cent. Soft drinks volumes were also down 5 per cent.

Volumes in South Africa are suffering from local unemployment, competitive pressure from international rivals, and cold weather at the start of the quarter. Added to these problems, SABMiller has recently been facing worker unrest at its subsidiary Amalgamated Beverage Industries (ABI), with strike action turning violent.

Mixed picture​

Meanwhile, in the booming Chinese economy SABMiller said sales volume growth of 6 per cent was lower than hoped. This was attributed to heavy snow and wet weather.

In India the brewer also struggled as volumes declined 7 per cent following excise increases and a continuation of regulatory impediments.

But bad news was not seen across the board. Some countries showed steady and even high sales growth rates.

In Latin America, beer volumes grew by 4 per cent in the quarter and soft drink volumes 9 per cent while in Russia volumes were up a staggering 34 per cent. But this high double-digit figure did partially reflect significant stocking up in advance of a substantial increase in excise duty in January.