AB InBev is struggling with disappointing beer sales

AB InBev has sold less beer than expected last quarter in two important markets, China and Brazil. Profit did increase, as the brewer managed to pass on increased prices.

Weaker than the market

The 9 % decline in sales on the important Brazilian market is a significant setback for AB InBev, especially since rival Heineken – which also published lukewarm results earlier this week – is gaining market share. In China, where sales has been falling for some time, volumes decreased by 6.6 %. Overall, volumes fell by 1.9 %: beer sales dropped 2.2 %, while non-beer sales rose by 0.3 %.

The company describes its performance as “worse than a weak sector”, but also points to unfavourable weather conditions in its press release. Revenue fell by 2 % to 15 billion dollars (13 billion euros), but organic growth was 3 %, the brewer of Corona, Stella Artois and Budweiser says. Still, the company’s EBITDA rose by 6.5% to 5.3 billion dollars (4.6 billion euros) as price increases were able to somewhat compensate for the lost volumes.

Rising debts

In the American market, volumes remained stable: that is a relief after several quarters of market share loss after conservative Americans started an “anti-woke” boycott following a campaign for Bud Light in 2023, featuring a transgender influencer.

CEO Michel Doukeris describes it as a quarter of profitable growth and maintains the outlook for the full year. However, observers did note that the group’s debts have risen to 68.1 billion dollars or 3.27 times EBITDA. At the end of 2024, it was still 60.6 billion dollars or 2.89 times EBITDA.