SABMiller: Duty rises depressing demand

The European lager market was continuing to toil under tough economic conditions, brewing giant SAB Miller said today.

In an interim management statement covering the three months to the end of June 2010, Graham Mackay, SABMiller's chief executive, added that "significant" duty rises in some markets were contributing to demand being depressed, with total lager volumes in the region falling nine per cent.

Mackay said that the group's overall lager volumes and soft drinks volumes for the quarter were one per cent below the prior year on an organic basis.

"As anticipated at the start of the year, consumer demand has remained uneven, with improvements seen in some countries and weakness in others.

"Recent excise-related price increases and, in the first two months, the timing of Easter, poor weather, and specific events in Poland and Colombia held volumes back in a number of key markets," he added.

Despite this, Mackay said lager volume performance improved through the quarter on an organic basis, "showing growth in June compared to the prior year".

"Results benefited from the impact of pricing despite increased excise-related taxes, and from some reductions in raw material input costs.

"We continued to increase our investment in brands and other market facing activities. Overall, the financial performance of the group in the quarter was in line with our expectations," he said.