UPDATE 5-Heineken sinks as damp summer, economy hit profits

* Sees volume, profit weakness in H2

* Forecasts 2011 net profit similar to 2010

* H1 oper profit 1.26 bln euros vs expected 1.32 bln euros

* H1 net before one-offs 694 mln euros vs expected 746 mln

* Shares fall 11.3 pct

* "Maybe first consumer company, to warn of an impact on consumer demand"

(Recasts top two paragraphs)

By Philip Blenkinsop

BRUSSELS, Aug 24 (Reuters) - Heineken NV sent a shiver through Europe's brewing industry on Wednesday with a warning that weak consumer sentiment and a damp summer would wipe out profit growth this year.

The news from the world No.3 brewer, the most exposed of the big players to western Europe's struggling economies, drove its shares down as much as 16 percent to a 21-month low and hit others in the sector.

The Dutch group, which saw first half profits fall short of expectations, was the last of the world's top four beer makers to report, but the picture it painted of economic uncertainty and unemployment driving Europeans and Americans away from bars and cafes was seen as a stark one for the food and drink sector.

"It's an implicit profit warning of 13 percent," said Trevor Stirling, beverage analyst at Bernstein Research.

"If you were an optimist you could say that tourists will go back to Egypt and summer in Europe would not be as bad next year, but Greece is unlikely to be better, Russia maybe not and barley prices will be a lot higher."

Heineken is Europe's largest beer maker and the market leader in Greece and Italy. It holds the number two spots in Ireland, Portugal and Spain, other countries either bailed out or seen by many in the financial markets as in line for rescue.

"Heineken is the first beverage company, maybe the first consumer company, to warn of an impact on consumer demand from the current crisis," said analyst Philip Morrisey at Berenberg Bank.

The company's shares were the weakest in the FTSEurofirst 300 index of leading European stocks in initial trading, dropping by as much as 16 percent to 30.40 euros, their lowest level in 21 months, before last trading off 11.4 percent at 32.10 euros at 1200 GMT.

Food and beverage stocks were among the weakest in Europe. Shares of Anheuser-Busch InBev , with half of the sluggish U.S. market , were down 3.2 percent. Carlsberg (CARLb.CO), which cut its outlook last week due to problems in Russia , were 1.5 percent lower.

Heineken trading conditions remained favourable in Latin America, sub-Saharan Africa and Asia-Pacific, but not in developed markets.

"We have seen a very bad summer ... At the same time, we also see in a number of markets, more in Europe and the USA, weak consumer confidence. You see uncertainty reflected in lower on-premise sales," Chief Executive Jean-Francois Boxmeer told a conference call.

Heineken has pushed into Mexico with its purchase last year of the brewing activities of FEMSA and has been buying breweries in Africa, notably Nigeria where it has some 70 percent of the market.

However, western Europe still represented 45 percent of revenue and 65 percent of operating profit in the first half.

Shares in SABMiller , with 70 percent of earnings outside Europe and North America and looking to push into Australia with its Foster's bid, were down a more modest 0.5 percent.

DAMP SUMMER

The Dutch brewer said it had already experienced weak beer sales in the normally high-selling season of July and early August due to poor summer weather in Europe and worsening consumer sentiment there and in the United States.

The company said this would affect second-half volumes and profit and it now expected full-year net profit before exceptional items and amortisation of brands to be broadly in line with last year's level on a like-for-like basis.

Analysts had on average believed Heineken would forecast net profit growth of 12-13 percent.

In the first half, the comparable net profit rose 5.7 percent, excluding new consolidations and currency effects, to 694 million euros ($999 million), below the average forecast in a Reuters poll of 746 million euros.

The company reported first half operating profit of 1.26 billion euros, up 3.9 percent, compared with analysts' consensus forecast of 1.32 billion euros.

Heineken had said in April it expected higher planned marketing spending to hit profit after the first quarter, particularly across Europe. Analysts said it was unlikely to have yielded the desired benefits given unseasonably damp and cold weather in northern Europe in July and August.

"Developing and building brands are long-haul efforts. It's not because we witness an exceptionally bad summer -- you just look out of the window -- that we should take ourselves away from the efforts we are currently doing," Van Boxmeer said.

Heineken said it expected a single-digit percentage increase in cost of inputs such as barley, much of which are bought a year in advance. Sharply higher prices for raw materials will have a larger impact on brewing costs next year.

Malt barley future prices EOBc1 are 20 percent higher than a year ago. (Reporting by Philip Blenkinsop, editing by Rex Merrifield, Hans-Juergen Peters and David Jones) ($1 = 0.695 Euros)