E-Malt.com News article: USA: Breweries are fighting with beer crisis on holidays

US brewers are struggling as they mark Independence Day because more people are turning to wine and spirits. Anheuser-Busch and SABMiller's Miller Brewing, which cut prices at the end of May to boost demand, are struggling to spark U.S. beer sales heading into Independence Day.

John Faucher, an analyst at New York-based JPMorgan Chase & Co., said both companies sold less beer during the four-week period that ended June 11, which includes the Memorial Day holiday. He cited ACNielsen data.

St. Louis-based Anheuser-Busch's volume fell 0.2 percent. Miller, owned by London-based SABMiller PLC, slid 1.8 %. Anheuser-Busch and SABMiller are vying to lift sales of beer during the summer season, partly by giving beer drinkers a price break.

Miller, the No. 2 U.S. brewer behind Anheuser-Busch, has vowed to cut prices further to keep pace with Anheuser-Busch. Miller Chief Executive Norman Adami vowed to follow suit. After Miller said it was "out-executed" over Memorial Day in the U.S., with its prices actually rising 1.2 percent, the company said it would lower prices further and begin running television ads promoting its beers as having more taste than Anheuser's. London-based SABMiller is the world's third-largest brewer.

"We continue to believe the Anheuser-Busch strategy is flawed," Miller spokesman Peter Marino said. "Even so, we're determined to make the pricing adjustments required to prevent Anheuser-Busch from taking market share from us based on price."

Anheuser-Busch said in April it would cut prices to jumpstart sales and narrow a gap with the price of Miller. For example, a case of Bud Light beer that sold for 45 cents more than Miller Lite now costs 15 cents more. Anheuser-Busch officials said lowering prices over the short term would increase the volume of beer sold in the second half of the year and into 2006.

"Our market is basically flat to slightly down," said Ray Guerin, chief operating officer of the beer division of Rosemont-based Reyes Holdings LLC, the largest U.S. distributor of Miller beers. "I think we've got all the national trends affecting that.

"People are drinking more wine and spirits. People are drinking more imports and I think there is a decline in domestic. That's where the losses are coming."


03 July, 2005