Brewers likely to disappoint

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INVESTORS hoping for solid signs of a recovery in consumer spending from the brewing and drinks reporting season, which starts this week, are likely to be disappointed, according to analysts at leading City finance houses, writes John Shepherd.

The five biggest brewers - Allied- Lyons, Bass, Grand Metropolitan, Scottish & Newcastle and Whitbread - all issued cautious trading statements in September and October.

'Since these comments were made, we do not believe there have been any significant improvements in underlying market conditions,' say analysts in SG Warburg Securities' season preview.

Patrick Kirby, of Nikko Europe, added: 'The forthcoming Budget is potentially a crucial issue in determining the rate at which domestic consumer confidence will recover.'

The drinks companies have been very active in political lobbying this year against increases in excise taxes, and Whitbread will undoubtedly seize the opportunity to make a further attack on the Government when it starts the season rolling on Thursday.

Brewers were left smarting after the last Budget when the Scotch whisky industry persuaded Norman Lamont, then Chancellor, to leave taxes on spirits unchanged. There have been indications that beer will not escape an increase in taxes this time round.

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