Stella sales down in UK as supermarket price cuts bite

InBev, the world's largest brewer, has reported a fall in UK sales of its flagship premium lager Stella Artois.

In a fiercely competitive UK beer market, the company admitted it had lost ground to competitors. InBev told analysts that 'aggressive' price promotions by supermarkets has added to its 'challenges' in the UK.

Reporting full year results, InBev said its global beer sales volume grew by 4.6 per cent in the second quarter of 2007 year-on-year, despite 'challenging' conditions in Western Europe.

In Western Europe second quarter volumes fell by four per cent, with UK volumes down by 10.7 per cent.

Volumes of Stella Artois dropped in Western Europe and climbed in the Americas and Central and Eastern Europe.

InBev saw its global names bring in volume growth of 2.7 per cent year-on-year in the quarter.

The company said that global volume growth for Brahma and Beck's was partially offset by the weak performance of Stella Artois in the UK.

Carlos Brito, InBev's CEO, said: "The second quarter has shown improvement in our overall business, with EBITDA margin expansion, volume growth and EBITDA growth. But we can do better. We have higher expectations for our China and UK operations.

"In those operations we have been outperformed by competitors and we must do better.

"The way to get back on track in these geographies is to continue to enhance our people capabilities, brand equity and in-market execution, thus building a sustainable and profitable platform for our businesses to grow."