AB InBev Hit by Market Share Drop in US

26 Feb 2016 --- Anheuser-Busch InBev, the US beer giant, has reported that its profits fell from $3.3 billion to $2.8 billion in the fourth quarter as its market share in the US dropped and it also suffered a slowdown in China. The maker of Stella Artois and Budweiser reported revenues were down 11 percent to $10.7 billion in the quarter.

AB InBev did not update the market on new details of its proposed takeover of SABMiller, a tie-up which will control 30 percent of the world’s beer market.

But it said it expects “the transaction to close in the second half of 2016” providing its gets the green light from regulators.

AB InBev’s performance was hit by declining volume sales in the US and Brazil last year.

In the US, its Budweiser brand performed well, helped by successful advertising campaign highlighting the brand’s quality and heritage.

AB InBev is hoping that Bud Light will have a strong year and benefit from its “Raise One to Right Now” advertising campaign, which it debuted during the Super Bowl.

Michelob Ultra, Stella Artois and Goose Island also delivered double digit growth in 2015 in the US.

But this was partially offset by market share loss in the Flavored Malt Beverage sector.

Volumes grew by 11 percent in the quarter in Mexico and seven percent over the year, helped by a favourable economic environment and good showings from Corona, Bud Light and Victoria brands.

In Brazil, volumes decreased by 2.7 percent overall in 2015, as the bad weather late in the year impacted sales. But its premium beers such as Stella Artois and Corona Original delivered good growth.

The Chinese market has been impacted by volume declines across the board, particularly hitting the value segments.

AB InBev’s volumes were down marginally year-on-year in the fourth quarter in China.