AB InBev UK sales hit by freetrade closure

Stella Artois and Budweiser brewer AB InBev UK saw its turnover reduce by £196.7m in 2011 following the closure of its independent freetrade business and the stopping of distribution of third-party products.

Overall turnover fell 15.5% to £1.24bn, according to accounts published at Companies House. The move also reduced AB InBev UK’s cost of sales by £194.1m – cost of sales in the year fell 17.4% to £1bn.

Losses before interest and taxation narrowed in the year from £26.1m to £3.6m; the company incurred higher costs relating to pensions in the previous year - £3.8m against £1.8m in 2011.

The company’s share of the shipment beer market fell slightly from 21.2% to 20.7%.

“Losses in the off-trade were mitigated by small gains in the on-trade. From a brand perspective, Stella Artois was down, Budweiser was up and Beck’s was flat.”

“Sales volumes saw a general decline during 2011 in line with the overall industry.” Parent company Ab InBev had already reported that own-beer volumes in its UK company fell 6% in the year.

AB InBev UK said Stella Artois Cidre, launched in the country in April 2011, had received “very positive feedback form the trade, backed up by encouraging launch volumes”. In eight months it sold 175,000 hectolitres, delivering retail sales values of £42.8m, the company revealed.

In addition, Budweiser 4.3%, which was launched in April 2011, has experienced a “good uptake and a strong number of installs throughout the UK”.

AB InBev UK said: “For 2012, the most significant challenge for the company will be the ongoing industry decline in both the on-trade and off-trade.

“In addition, econometric factors such as high inflation and high unemployment add to the challenges of operating in a weak economy. To sustain volumes the company will continue to operate a simplified and focused business model, which will allow the company to reduce costs whilst improving distribution and rate of sale of our products, with the aim of driving top line growth.”

The company said it continues to transfer the running of a number of back office functions to shared service centres in Budapest and Prague. “This has allowed the company to realise overhead savings which are also expected to continue in future years.”

As with 2010, directors did not recommend the payment of a dividend.

Stuart MacFarlane resigned as chief executive in December 2011 and was replaced by Inge Plochaet.