AB InBev’s UK arm reported deeper financial losses despite price increases over the last year.
- The brewer faced a pre-tax loss of £72.1m in 2023, following a series of yearly losses.
- Increased sales were undermined by economic challenges, including inflation and supply chain issues.
- Despite a positive global outlook, the UK market struggled with industry-specific downturns.
- AB InBev’s strategic adjustments were insufficient against persistent economic uncertainties.
AB InBev UK’s financial performance deteriorated further in 2023, registering a pre-tax loss of £72.1 million. This marks a continuation of the company’s recent pattern of financial setbacks, with prior losses of £89.5 million in 2022 and £6.4 million in 2021. The company last recorded a profit of £40.9 million back in 2020.
During the last financial year, AB InBev UK managed to increase its sales from £1.59 billion to £1.66 billion. However, this growth was not enough to offset mounting losses. The company cited persistent inflationary pressures, supply chain disruptions, and declining household incomes as major challenges that contributed to its financial woes.
Despite experiencing some easing of inflation towards the end of the year, economic uncertainty persisted, resulting in the need for agile supply chain management and strategic pricing adjustments. The beer industry, particularly the off-trade sector, witnessed a downturn as a result of increased consumer prices and government-imposed beer duty hikes starting in August 2023.
Although the off-trade grocery sector maintained a degree of stability, it continued to fall short of pre-pandemic performance levels. In contrast, AB InBev’s global operations saw a more optimistic outcome in the first quarter of the year, achieving an underlying profit of £1.2 billion, up from £1.05 billion during the same period last year.
CEO Michel Doukeris commended the global performance, attributing success to pricing strategies, ongoing premiumisation efforts, and the overall strength of the beer category. However, these positive global results did not translate to the UK arm’s local market struggles.
AB InBev UK’s increased financial losses illustrate the challenging market conditions it faces despite global successes.
