AB InBev UK faces deepening financial losses despite a rise in sales.
- The company reported a pre-tax loss of £72.1m in 2023, up from previous years.
- Inflation, supply chain issues, and reduced household incomes are significant challenges.
- The off-trade sector sees a downturn due to consumer price increases and government tax.
- Global operations contrast with the UK’s losses, showing profitability in the first quarter.
AB InBev’s UK division recorded a pre-tax loss of £72.1m in 2023, reflecting a worsening financial situation compared to prior years. Despite attempts to counterbalance economic pressures by raising product prices, these efforts have not yielded a return to profitability. Sales indeed increased slightly from £1.59bn to £1.66bn, however, this was insufficient to offset the mounting losses.
The persistent challenges nominated by AB InBev include ongoing inflation and supply chain disruptions, both of which have exerted considerable strain on operations, alongside dwindling household incomes. The company acknowledges that despite a slight easing of inflationary pressures later in the year, the economic conditions demand strategic agility in supply chain management and pricing models.
The UK beer market, particularly the off-trade segment, experienced notable declines driven by heightened consumer prices and the imposition of elevated government beer duties from August onwards. Although AB InBev’s grocery sector operation exhibited stability, it continues to trail behind pre-pandemic performance levels.
In contrast to its UK operations, AB InBev’s global business reported a positive first quarter with an underlying profit of £1.2bn, up from £1.05bn the previous year. CEO Michel Doukeris attributed this growth to successful price adjustments, premiumisation strategies, and overall strength within the beer category, highlighting a stark contrast with the UK division’s struggles.
Despite strategic efforts, AB InBev UK continues to confront complex economic challenges that hinder its return to profitability.
