AB InBev, Carlsberg bubble over in Europe

LONDON: A rebounding European beer market is buoying Anheuser-Busch InBev and Carlsberg, lifting demand for mainstream brands such as Stella Artois and Tuborg.

The UK return of AB InBev’s Bud Light, the pale lager bleeding market share in the US, is fueling sales in western Europe, while Carlsberg’s low-alcohol beer brand Nordic is driving sales in Scandinavia, the companies said separately on Thursday.

“Europe is definitely picking up for all the beverage alcohol companies as consumer spending is starting to rise in most of the region,” said Trevor Stirling, an analyst at Sanford C Bernstein. A surge in euro-area economic confidence to the highest in almost a decade stokes beer sales and offers brewers more pricing power, Stirling said.

AB InBev, the world’s largest brewer, and Danish rival Carlsberg joined Heineken in surprising the market with first-quarter results that beat estimates after headwinds in Latin America and eastern Europe hurt performance through most of last year. Carlsberg’s focus on more expensive beers such as Grimbergen paid off in France and Italy.

Sales volume of the Belgian brew rose 25% in the quarter. "We're really stepping up the distribution in France, Switzerland, Denmark and Italy," Carlsberg Chief Executive Officer Cees 't Hart said by phone, cautioning that "growth at these high levels is of course difficult to continue." AB InBev shares rose as much as 5.1%, while Carlsberg gained as much as 2.9%.

Beyond its Stella Artois and Corona, which posted sales growth of 21% and 18%, respectively, AB In-Bev is also seeking to ramp up sales of more expensive beers in developed markets.