By Martinne Geller
NEW YORK (Reuters) - Molson Coors Brewing Co
Cash-strapped consumers balked at price increases in several markets for the maker of Coors Light and Molson Canadian beer, which saw worldwide quarterly beer volume fall 4.2 percent to 10.7 million barrels. The figures exclude the loss of its U.S. sales to MillerCoors, a joint venture formed in July with SABMiller Plc
Volume in the quarter fell 9.4 percent in Britain and 0.6 percent in Canada. MillerCoors said U.S. volume fell 4.3 percent, as distributors sought to lower inventory levels.
But January sales rose at a low single-digit rate in the United States, giving Chief Executive Peter Swinburn some hope that consumers in Molson's largest market by sales will still reach for a beer in a recession.
"In the fourth quarter, we saw softness in all of our markets. That's a fact," Swinburn said in an interview. "Coming in to the new year ... in Canada and the U.S.. there's no real data points that would say we're seeing softening of demand."
Molson January sales fell at a low double-digit rate in Britain and a mid-single digit rate in Canada. Swinburn said the decline in Canada was due to an unusually strong January last year.
Molson's fourth-quarter income from continuing operations tumbled 49 percent to $90.7 million, or 49 cents per share, from $176.2 million, or 96 cents per share, a year earlier.
Excluding special items, the company earned 57 cents per share, missing analysts' average estimate of 71 cents, according to Reuters Estimates.
CURRENCY AND COMMODITIES TAKE A TOLL
The company said the stronger U.S. dollar versus the British pound and Canadian dollar accounted for 55 percent of its fourth-quarter profit decline. Higher costs for commodities, such as packaging materials and fuel, also hurt.
Molson said it has commodity cost hedges in place for the rest of 2009, so it will not feel the benefit this year from prices falling well off last year's highs.
Profit in Molson's Canadian business fell 23 percent to $99.8 million, as a 19 percent depreciation in the Canadian dollar shaved off $18 million. Profit in the UK business fell 23.6 percent to $30.6 million, as a 23 percent decline in the value of the British pound reduced earnings by $9 million.
Excluding the currency hit, profit fell 5 percent in Canada and was flat in Britain -- a performance Morningstar analyst Ann Gilpin said was "incredible," considering UK volume fell over 9 percent amid a deteriorating economy and smoking bans that are keeping many would-be pub-goers at home.
Earlier on Tuesday, MillerCoors said fourth-quarter underlying profit rose 16.5 percent as it accelerated its cost-saving targets and raised some prices.
Overall U.S. sales from wholesalers to retailers, a closer measure of consumer demand, fell 2.3 percent, as increases for the Coors Light, MGD 64, Blue Moon, Keystone Light and Miller High Life brands could not offset a 7.5 percent decline in Miller Lite, which had a particularly big price increase.
Molson shares closed down $3.20 at $37.30 on the New York Stock Exchange.
(Reporting by Martinne Geller; Editing by Dave Zimmerman, Lisa Von Ahn, Leslie Gevirtz)
