Molson Coors beer volumes down indicating worse than thought recession
The combined U.S. operations of SABMiller and Molson Coors Brewing with brands such as Miller Lite and Coors Light, said underlying net income in the October-December 2009 quarter was USD 106.1 million with net sales dipping 1.6 percent to USD 1.71 billion.
“It’s tough out there, and we saw the effect of ongoing economic pressure and unemployment on beer sales, especially in the fourth quarter,” said MillerCoors CEO Leo Kiely in a results statement.
The brewer said that marketing and administration costs fell by 2.7 percent in the quarter and would have been around 6 percent when excluding the significant impact of increased share-based salary bonus schemes which were driven by a strong SABMiller stock price over 2009.
The company, formed in July 2008, has said it expects to make USD 750 million of cost savings over the first four-and-a-half years of its merger. At the end of 2009, cumulative cost savings had reached USD 272 million.
The brewer has a U.S. beer market share of nearly 30 percent behind Budweiser-brewer AB-InBev with a share of around 50 percent.
As concerns Molson Coors’ global operations, the brewer reported a lower-than-expected quarterly profit mainly on weak volumes across all markets, prompting the beer maker to issue a cautious volume forecast for 2010.
What weighed down Molson Coors was cost inflation in the U.S. and Britain. The cost of goods sold per hl increased 5.6 percent from the year-earlier period, hurt by rises in brewing and packaging material costs, including glass and aluminum.
Looking forward, Peter Swinburn, Molson Coors’ President and CEO said: “Overall consumer demand remains sluggish, and we see these conditions continuing to impact volume and mix in the near term.”
“In 2010, we expect volume to remain challenging, especially in the first half,” Mr Swinburn added.
