Briefs: Coca-Cola, Anheuser Busch and Asashi

By Neil Merrett

- Last updated on GMT

Related tags Anheuser busch Cent Beer

Rounding up the beverage business this week: Coca-Cola Enterprises
and Anheuser Busch continue to increase profits against cost
difficulties, while Japanese brewer Asashi takes steps to protect
itself from declines in its native beer market.

Coca-Cola on track despite cost crunch Coca-Cola Enterprises (CCE) posted a 3.5 per cent increase in revenues, amounting to $5.4bn, as a company-wide efficiency drive helped offset the effects of declining sales volumes for some of its brands.

The group's drive for cost-efficiency and increased pricing in North America also allowed the company to record marginal operating profit gains of 0.5 per cent to $450m. However, operating margins for the period fell by a percentage point to 8 per cent for the three month period ending 28 September.

CCE said that although combined sales volumes of its bottle cases and can beverages declined by 2.5 per cent during the period, the group introduced a four per cent increase in net pricing in a bid to maintain profitability.

The figures exclude the effects of currency translation.

Group president and chief executive officer John Brock said the performance had ensured the group was remaining on track to meet its growth ambitions.

"We continue to make solid progress against our strategic objectives, driving improving levels of customer service, efficiency and effectiveness through our restructuring efforts as we significantly expand and enhance our brand portfolio," he stated.

"These efforts are strengthening our company for the long-term and will enable us to reach our long-term performance targets more quickly as we move beyond this year's unusually high increase in the cost of goods environment in North America ."

Global growth for Anheuser Busch Revenues for US-based brewer Anheuser Busch were up 7.4 per cent to $5.2bn in the third fiscal quarter due to an expanded international presence and changes to the group's domestic portfolio of brands, the company said.

Profit before tax was up by 10 per cent to $872m for the three-month period ending 30 September on the back of improved sales for all of its brands, particularly in higher value imported beers.

Operating margins improved by a single percentage point to 17 per cent.

Group president and chief operating officer August Busch IV said the performance reflected the group's continued focus on higher value imported beer brands.

"We are pleased with our earnings performance this quarter, with all of our operating segments reporting higher sales and profits," he stated.

"Sales volume and revenue growth in our US beer business benefited from our broadened beer portfolio, with greater participation in the high end segment.

Outside of the US, the company said that international deals with brewers like Mexico-based Grupo Modelo are ensuring that the company remain ahead of its long-term growth targets.

Anheuser Busch said that it intends to begin increasing prices for the groups US beer brands up to the first quarter of 2008 to drive further growth in its operations.

Asashi manoeuvres in Japanese beer restructuring Asahi Breweries hopes to acquire the entire share value of the Asashi Softs Drinks company to boost its presence outside of core beer production in a $477m deal, according to news reports.

The company will attempt to take full control in the venture, from its current stake of 51.17 per cent, according to the Reuters news agency.

News of the deal comes at a turbulent time for the Japanese beer industry, with a growing number of the country's brewers looking to diversify their operations .

Earlier this week, local rival Kirin announced a Y300bn (€1.85bn) deal to acquire a 50.1 per cent stake in pharmaceutical group Kyowa Hakko in a bid to integrate it into its existing biotech franchise, Kirin Pharma.

Both firms already focus on antibody drugs and so by merging, they can expect to make a number of cost and efficiency savings.

The beer market in Japan has gone flat of late, and so it is perhaps not surprising that Kirin is looking for other growth areas to exploit.

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