Beer Drinkers Cut Back as Bud Brewer Raises Prices

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Brewer AB InBev said drinkers weren’t giving up their brews despite rising prices.

Photo: Igor Golovniov/Zuma Press

Budweiser brewer Anheuser-Busch InBev SA BUD -0.74% reported a fall in sales volumes for the fourth quarter as drinkers in North America bought less of the company’s beer amid rising prices.

The drop comes as companies across the consumer-products industry grapple with how much they can raise prices to offset rising costs without deterring shoppers. For much of the past year, AB InBev said drinkers weren’t giving up their brews despite inflation’s bite, though that trend appeared to end in the last quarter.

AB InBev on Thursday said total volumes declined 0.6% in the final three months of 2022, missing analysts’ expectations of a 2.1% increase. Shares of the company fell more than 3% in early trading in Brussels. 

The steepest fall in quarterly volumes came in North America, down 8.3%. In the U.S. AB InBev reported weaker sales to wholesalers and retailers, which it attributed to a soft industry, price increases and poor weather in December. Still, it said revenue rose in the U.S. thanks to higher selling prices and its strategy to push into more premium brews.

The brewer has for years seen its mainstream brands Bud and Bud Light decline, partly amid a broader shift by American drinkers from beer toward wine and spirits. In response, it has worked to increase its exposure to faster-growing brands such as Michelob Ultra and its premium offerings such as Stella Artois and Kona Big Wave. The company said those brands outperformed the industry last year.

AB InBev also said quarterly volumes fell in China, down 6.9%, where beer sales were hit by Covid-19 restrictions. 

Despite significant challenges in two of the company’s largest markets, AB InBev reported a 10.2% rise in quarterly revenue to $14.67 billion boosted by higher selling prices. Net profit for the quarter also rose, coming in at $2.84 billion, up from $1.96 billion in the same period a year earlier.

Looking ahead, AB InBev said it expected earnings before interest, taxes, depreciation and amortization to grow in line with its medium-term outlook of between 4% and 8%, and for revenue to grow ahead of Ebitda, supported by a combination of volume and price.

—Michael Susin contributed to this article.

Write to Peter Stiff at [email protected]

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