High costs hit SABMiller's profit

http://news.bbc.co.uk/go/rss/-/1/hi/business/8050066.stm

Version 0 of 1.

Global brewer SABMiller has reported a 9% fall in annual profits to $2.96bn (£1.96bn), despite putting up the prices of its beers.

SABMiller said it had raised its prices in response to rising commodity costs.

In the UK, however, the firm said it had increased its share of the premium lager market by 20%, as many drinkers refuse to switch to cheaper brands.

The company's beer brands include Peroni, Grolsch, Pilsner Urquell and Miller Lite.

The brewer's profits of $2.96bn for the year to the end of March, were down from last year's profits of $3.26bn. Global sales increased 5% to $25.3bn.

'Generation Y'

"The group delivered robust results in the face of multiple challenges including higher commodity costs, an appreciating US dollar and weakening consumer spend," said chairman Meyer Khan.

But it added that in the UK its brands were "significantly outperforming" the wider lager market. The overall beer market in the UK has declined by 7% over the year.

"Many people in their 20s and 30s, or the so-called 'Generation Y', are responding to their first ever recession," said Nick Miller, managing director of SABMiller's UK operations.

"Rather than battening down the hatches as their parents may have done, they are refusing to give up luxuries altogether, choosing instead to buy everyday luxuries such as their favourite beers, foods or toiletries."