* Q2 core profit $3.59 bln vs Reuters poll $3.72 bln
* Beer volumes down 0.5 pct
* Marketing, distribution costs rise
* Sees U.S. shipments up, distribution costs down in H2
* Shares down 3.5 pct, among weakest in Europe
By Philip Blenkinsop
BRUSSELS, July 31 Anheuser-Busch InBev,
the world's largest brewer, fell short of second-quarter
earnings expectations, selling less beer and spending more on
distribution and marketing new U.S. brands.
The maker of Budweiser, Stella Artois and Beck's forecast an
improved second half after posting a second-quarter 2.5 percent
like-for-like rise in core profit (EBITDA) to $3.59 billion,
below the average $3.74 billion in a Reuters poll.
Overall group beer volumes fell by 0.5 percent, in contrast
to rival SABMiller which benefited from its presence in
Poland, one of the hosts of the Euro 2012 soccer tournament, to
sell 5 percent more in the quarter.
AB InBev's shipments fell to wholesalers in the United
States, where its market share is almost 50 percent.
Marketing costs also increased on new U.S. brands -
including a 6 percent Bud Light Platinum beer and
margarita-flavoured Lime-A-Rita - and the company spent more to
transport beer across both the United States and Brazil.
AB InBev Chief Financial Officer Felipe Dutra acknowledged
that the second quarter had been 'challenging'.
"However, we are confident about the momentum we have in our
top three markets -- U.S., Brazil and China -- and look forward
to a stronger second half compared to the first half," he said.
AB InBev shares were down 3.6 percent at 0906 GMT and were
among the weakest in the FTSEurofirst 300 index of
leading European stocks.
"They've had higher distribution expenses, increased cost of
goods sold and some market share losses... They've shown they
are human. It's a weak quarter, although it's not a disaster,"
said ING beverage analyst Gerard Rijk.
AB InBev shares are still up 35 percent in the year to date,
double the rise of the STOXX European food and beverage index
The company said U.S. shipments to wholesalers would grow in
the third and fourth quarters and that distribution costs
overall should decline in the second half.
"It's clearly below expectations, but most of these things
are related to this quarter and will reverse or fade in the
second half," said Bernstein analyst Trevor Stirling.
The Americas represent 75 percent of AB InBev's revenue and
more than 85 percent of earnings. That will increase after its
$20.1 billion buyout of Mexico's Grupo Modelo agreed last month.
AB InBev has almost 50 percent of the beer market in the
United States, the world's second biggest after China, and
nearly 70 percent in Brazil.
The company's strategy has been based on selling more beer
in emerging markets, notably Brazil, and persuading U.S.
drinkers in particular to pay more, either through increasing
prices or shifting to premium brands.
It also hiked prices last year in Brazil to keep ahead of
inflation and to tap a 7 percent real increase in the minimum
wage this year.
The Belgian-based brewer is the second global player to
report on the April-June period after SAB Miller.
Carlsberg reports second-quarter results on Aug.
15 and Heineken on Aug. 22.