AB InBev, the global beverage giant, continues to face financial challenges in the UK despite increased sales.
- Pre-tax losses grew to £72.1m in 2023, even as sales rose to £1.66bn.
- Persistent inflation and supply chain issues have significantly impacted the company’s UK operations.
- Despite global success, the UK market remains under pressure from economic uncertainties.
- The beer industry overall has seen a downturn, particularly affected by rising consumer prices and tax hikes.
AB InBev, the renowned producer of brands such as Budweiser, Corona, and Stella Artois, is experiencing continuing financial difficulties within its UK operations. The company’s pre-tax losses have widened to £72.1 million in 2023, compared to previous losses of £89.5 million in 2022 and £6.4 million in 2021. This trend is notable as AB InBev’s UK division last reported a profit in 2020, achieving £40.9 million at that time.
The increase in sales from £1.59 billion to £1.66 billion has not offset the financial setbacks faced by the UK arm, with inflation and supply chain disruptions being pointed out as persistent challenges. These issues, combined with declining household incomes, have created a difficult environment for AB InBev’s operations in the region.
A statement from AB InBev’s board notes that even with some relief from inflation later in the year, economic uncertainties necessitated agile supply chain management and strategic pricing adjustments. However, these measures were not sufficient to maintain profitability amidst a declining beer market.
Particularly affected is the off-trade beer sector, which has experienced a downturn relative to 2022, driven by higher consumer prices and government-imposed beer duty increases from August. While the grocery sector remains relatively stable, it continues to lag behind pre-pandemic performance levels.
Globally, the company has performed more favourably, reflecting a contrast to UK operations. AB InBev’s CEO Michel Doukeris highlighted the global strategy’s success, noting effective pricing actions and a general strength in the beer category, which bolstered the company’s position.
AB InBev faces an uphill battle to overcome economic challenges affecting its UK operations despite global success.
