USA: Bear Stearns downgraded Anheuser-Busch Cos. to peer perform from outperform Wednesday, March 30, citing weakness in U.S. beer sales, according to Dow Jones. "We project that the softness in U.S. beer that began in early 2003 will continue into 2005 with no clear end in sight," analyst Carlos Laboy said in a note to investors. "A-B is too heavily exposed to the sluggish U.S. to assume any serious growth upside this year."

Bear Stearns had figured that the brewer of Budweiser and Bud Light would benefit from declining interest in Atkins diets and better weather and grow domestic shipments by 1% this year. "But that is not happening," Laboy said. Bear Stearns has lowered its domestic volume growth estimate for Anheuser-Busch from 1% to 0.4%.

He said Anheuser-Busch's new products, such as Budweiser Select and B-to-the-E, don't look like the answer. "We had expressed some optimism that A-B might be able to innovate its way out of its U.S. funk," Laboy said. But, "we project that the success of B(e) will be limited and the launch of Budweiser Select will likely be neutral at best."

In addition, competition from wines and distilled spirits continue to hurt the beer industry, Laboy said. "The pendulum has swung in wine and spirits' favor," he said and added, "beer has an uphill battle for consumer attention for the foreseeable future."

Bear Stearns does and seeks to do business with the companies it analyzes. Laboy does not own share of Anheuser-Busch.

Shares of Anheuser-Busch were trading recently at $47.60, up 34 cents or 0.7%, on volume of 1.7 million shares. Average daily volume is 2.8 million.

03 April, 2005