Global Brewers Hit Hard by China's Spending Cut

Anheuser-Busch InBev and Carlsberg saw lower sales in Q3 as consumer spending declined, especially in China. Factors such as economic challenges, competition from local brands, and pricing strategies contributed to the downturn. Both giants are re-evaluating strategies to focus on mainstream over premium offerings.

Two of the largest beer producers, Anheuser-Busch InBev and Carlsberg, experienced sales below analyst expectations in the third quarter, as many consumers reduced spending on beer. The drop had a notable impact in China, where consumers opted for less expensive options, which led to Anheuser-Busch InBev's shares dipping by nearly 4%.

The company reported a double-digit decrease in both profit and revenue in China. Other significant markets, including the United States, Mexico, and Europe, also witnessed declining volumes due to subdued consumer demand. A mix of sluggish economic conditions, high inflation, and competition from local rivals have negatively impacted the expected recovery in growth.

Carlsberg similarly faced decreased volumes, with CEO Jacob Aarup-Andersen stating the strategic shift towards promoting premium brands may need to be reconsidered in favor of stronger mainstream brand focus. Despite challenges, both companies see potential in evolving their brand strategies over the long term.

(With inputs from agencies.)