According to a recent WSJ poll …
Question: Overall, how do you feel about the results of this year’s elections — do you feel they are very positive for the country, somewhat positive, somewhat negative, or very negative for the country?
http://online.wsj.com/public/resources/documents/WSJpoll111710.pdf
TakeAway: Domestic beer makers recently raised prices and narrowed the price gap between premium domestic lagers and subpremium beers.
With less economic incentive for consumers to trade down to domestic subpremium beers, sales of such beers are down 4.1% versus 0.8% for domestic premium beers.
The heavy consolidation of the U.S. beer market has given the two dominant firms considerable power to sustain such price increases.
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Excerpted from Wall Street Journal, “Sticky Price Hikes Help Beer Profits,” by David Kesmodel, November 3, 2010
The stubbornly high U.S. jobless rate continues to plague the biggest beer makers, which are expected to report declining third-quarter U.S. unit sales this week, even as they divulge promising signs due to greater pricing power. …
The U.S. divisions of [Anheuser-Busch InBev NV and Molson Coors Brewing Co.] raised prices by between 50 cents and $2 a case in September, … the hikes generally are sticking. Another positive indicator: fewer drinkers appear to be trading down from premium brews such as Anheuser’s Bud Light to less expensive beverages such as Busch Light and Natural Light. …
The weak employment picture hurts mass-market lager makers that depend heavily on sales to 21-to-35-year-old men. But Anheuser and MillerCoors are demonstrating strong pricing power, enabling them to raise their revenue per unit of volume. They also continue to reap the benefits of cost reductions stemming from their 2008 mergers.
Anheuser, which controls about 49% of the U.S. market, and MillerCoors, with about 30%, lifted the prices of their subpremium brands in September, narrowing the price gaps with premium lagers such as Bud Light and Coors Light. That seems to be a factor in recent weaker sales for the inexpensive, low-margin brews. …
Unit sales of domestic premium brews fell just 0.8% in food, drug and mass-merchandise outlets, excluding Wal-Mart Stores Inc., in the 13 weeks through Oct. 3 versus a year-ago … In contrast, domestic subpremium beers fell 4.1%. …
Edit by DMG
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Full Article
http://online.wsj.com/article/SB10001424052748703778304575590372679030444.html?mod=djemMM_t
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