Russia drags down AB InBev

Brewing giant AB InBev has seen global beer volumes slide by 2.7% in its third quarter, driven down by declines in Europe, especially Russia.

The owner of brands including Stella Artois, Budweiser and Beck’s reported Russian sales – impacted by political tensions over the country’s activities in Ukraine – as being “under pressure”, after volumes there fell by around 20% in its third quarter and 14% over the first nine months of its financial year.

Total AB InBev profits before interest, tax, depreciation and amortisation so far this year have reached US$4.5 billion on sales of $12.2bn, a figure that falls short of the $5bn predicted by analysts.

Commenting on the group’s UK performance, Inge Plochaet, business unit president for AB InBev UK, described the company as “pleased” with a volume increase of 1.3% in the first nine months of 2014.

“This was driven by excellent growth in Budweiser in both the on- and off-trade and a very strong performance in Stella Artois in the on trade and retail,” she reported.

While acknowledging a 9.8% volume slide during the third quarter, Plochaet explained: “this was driven by the exceptionally good weather in July 2013 which led to significant volume increase in last year’s third quarter results, as well as customers having high stock holdings following the World Cup.”

Looking ahead to its full year results for 2014, AB InBev anticipated a pick up in US and Mexican volumes in line with the countries’ strengthening economies.

It also forecast a return to growth for Brazil, thanks to the 2014 FIFA World Cup, and “a year of solid volume growth in China”, despite a third quarter slide due to unseasonably cold weather in August and September.