Wednesday, August 21 12:47:39
Growth in emerging markets could not rescue Dutch brewer Heineken and rival Carlsberg on Wednesday from poor spring weather and grinding economic recession in much of Europe.
But both forecast strong demand in Asia would ensure full-year earnings match or go beyond last year's levels and Heineken said it would push new products such as Radler, a mix of lager and lemon juice, to draw back European drinkers.
Heineken, the brewer with the greatest sales in Europe, said austerity-driven beer excise hikes, such as in France, and subdued consumer sentiment in Europe and the United States were hitting demand, with little improvement seen.
Chief Executive Jean-Francois van Boxmeer said trading conditions would most probably remain challenging after a first half he acknowledged was below the group's expectations.
"Certainly for Europe and North America we don't see any substantial trading condition change for fast-moving consumer goods and our industry in particular," he said.
Carlsberg CEO Jorgen Buhl Rasmussen echoed that view for Western Europe at least, saying the region would be challenging in 2014.
Heineken's Van Boxmeer said that brewers had suffered from a slowdown of growth in traditionally high-growth countries, such as Brazil and in Africa.
"I would not make the projection that the growth rates we were used to before would reignite."
However, Asian demand was strong.
The world's top brewers are relying on emerging markets for growth given a prolonged squeeze on incomes in austerity-hit Europe and limited U.S. expansion, but such growth has been uneven, with weakness this year in Brazil and Nigeria.
Heineken, the world's third largest brewer, reported first-half operating profit above the average in a Reuters poll, but earnings per share below market forecasts.
World number four Carlsberg, which is market leader in Russia, slightly lagged market forecasts for operating profit and revenue in its second quarter after strong Asian growth failed to compensate for sluggish Europe.
The Danish brewer kept its 2013 guidance but cut its forecast for the Russian beer market growth to a mid-single-digit percentage point decline from a previous forecast of a flat market after a first half hit by slower economic growth and a ban on beer sales from kiosks.
Morten Imsgard, analyst at Sydbank, said Carlsberg was gaining market share in Russia, but the market was in poor shape. "The process of getting consumers into supermarkets from kiosks has proven more difficult than Carlsberg had expected. 2013 will not be a sunshine story in Russia," he said. (Reuters)