Economic Downturn Still Affecting American Beer Market

According to a report published in the Trinidad and Tobago Guardian Online, said this is according to a UBS analyst who further indicated that beer makers have seen their domestic sales volume slump for some time.

The key market – according to the report – has been hard hit by high unemployment that has cut into their buying power. Companies have raised prices to offset slower sales and the market will eventually recover, said analyst Jason DeRise. But beer makers need that volume recovery for long-term survival. And right now it’s not there: US domestic beer shipments fell 2.7 per cent in May, compared to the prior year.

In a note to investors, DeRise said he expects Anheuser-Busch’s US sales volume to fall for the year and to be flat in 2011. However, he reiterated a “Buy” rating on the parent company’s stock as he sees it as undervalued. Shares of Anheuser-Busch Inbev SA have traded between $47.65 and $64.77 during the past 52 weeks and were trading at $55.91 in afternoon trading Friday. Beer sales should pick up in 2012 while those higher prices stick, DeRise said, which would drive strong profit growth. (AP)

 

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