SABMiller suffers 9% profits hit

Brewing giant SABMiller’s annual profits suffered a 9% hit despite raising the price of its beers to combat rising commodity costs.

The company, which owns brands including Peroni, Miller Lite, Grolsch and Pilsner Urquell, posted annual profits of £1.96bn for the year end to March, down from last year’s figure of £2.15bn, although global sales increased 5% to £16.72bn.

The firm said it had increased its share of the premium lager market in the UK by 20%, enhancing its belief that consumer will still refuse to switch to cheaper beer brands despite the recession.

The world’s second-largest brewer said that while its performance in the UK was “significantly outperforming” the global market, the overall beer market in the UK had dropped by 7% over the course of the year.

Chairman Meyer Khan said: “The group delivered robust results in the face of multiple challenges including higher commodity costs, an appreciating US dollar and weakening consumer spend.”

Managing director of SABMiller’s UK operations, Nick Miller, added: “Many people in their 20s and 30s, or the so-called ‘Generation Y’, are responding to their first ever recession.

“Rather than battening down the hatches as their parents may have done, they are refusing to give up luxuries altogether, choosing instead to buy everyday luxuries such as their favourite beers, foods or toiletries.”

Meanwhile the brewer has revealed plans to acquire a stake of around 30% in Kompania Piwowarska, the largest brewer in Poland, from polish investor Jan Kulczyk, who would receive 3.8% of SABMiller shares, worth around $1.1bn, as a result of the deal.

The transaction will result in SABMiller becoming the sole owner of the Kompania Piwowarska group, which owns brands such as Tyskie, Zubr and Lech.

Alan Lodge, 18.05.2009