* Diageo Q3 sales growth 4 pct vs forecast 5 pct
* SABMiller Q4 lager volume growth 3 pct, LatAm down 1 pct
* Remy Q4 sales rise 12.4 pct as cognac sales hold up
LONDON, April 18 Global drinks companies Diageo
and SABMiller reported a fall in sales for the first three
months of 2013 in major emerging markets on Thursday, blaming
weaker economic conditions for dampening spending and pushing
consumers to trade down.
Their weak trading adds to evidence that markets such as
Brazil and South Korea are slowing and that this is feeding
through to consumer spending on discretionary goods.
But brewer SABMiller had some bright spots,
including parts of Africa and also eastern Europe, where new
premium product launches helped boost sales. And France's Remy
Cointreau bucked the gloomy trend, with solid China
New Year cognac sales and a sales increase in Russia and
Diageo, the maker of Johnnie Walker whisky and
Guinness stout, said volume fell 1 percent in the three months
to end-March and sales growth was 4 percent, below forecasts,
despite strength in its biggest business, U.S. spirits.
Growth slowed in all Diageo's emerging market regions, with
weak consumer sentiment particularly noted in Brazil, where
retail sales have fallen as consumers feel the pinch of a
struggling economy and high inflation.
Nigeria was also weak, as was South Korea, where the scotch
market has been in decline as consumers trade down, Diageo, also
the owner of Tanqueray gin and Baileys liqueur, said.
Diageo shares fell 0.7 percent to 1,961 pence. They enjoyed
a strong run last year, rising around 30 percent, but have
retreated over 7 percent since the start of April.
Analysts said the company's fundamentals remained unchanged
and that technical issues related to shipment phasing had
distorted the numbers.
"Given our market positions and geographic diversity we
remain confident that Diageo's performance continues to be in
line with our medium term guidance," said Diageo chief executive
Paul Walsh in a statement.
Brewer SABMiller, maker of Peroni and Grolsch, also flagged
weak demand in Latin America. It reported an overall 3 percent
rise in lager volumes for the quarter, in line with estimates,
but posted a surprise 1 percent drop in Latin America, its
SABMiller does not have a significant presence in Brazil but
has over 90 percent of the market in Colombia, Ecuador and Peru,
where it sells brands like Aguila and Cusquena.
Softer economic conditions, local dry laws in Peru and
Ecuador and a price increase in December all impacted on sales
in the period, the firm said.
However, strong trading in Zambia and Mozambique led to 9
percent volume growth in Africa, with Europe also performing
well, driven by new premium launches in Poland, Romania and the
French spirits group Remy Cointreau posted better
than expected quarterly sales growth of 12.4 percent, as cognac
demand for the Chinese New Year celebrations held up and sales
rose in Russia and Britain.
Remy's statement reassured the market on the resilience of
cognac in Asia, after Pernod Ricard had flagged that
its Chinese New Year business had slowed due, in part, to the
new government clampdown on luxury gifts.
"Remy delivered sales above consensus with a rare (for the
liquor group) sequential acceleration this March quarter; we are
becoming more constructive on hold-rated Remy," analysts at
The broker retained a 'buy' on Diageo, citing an
"unwarranted" discount to Pernod, expanding emerging markets
presence, and M&A potential.