Higher tax bill, weak Canada sales hit Molson Coors profit

Thu Feb 14, 2013 1:20pm EST
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By Siddharth Cavale

(Reuters) - Molson Coors Brewing Co (TAP.N: Quote) reported a 28 percent decline in fourth-quarter profit as its tax bill more than doubled and beer sales slumped in Canada, its top market.

While total beer volumes rose about 15 percent, helped by the company's acquisition of central European beer maker StarBev in June, volumes in Canada fell nearly 12 percent.

Molson's Canadian business, which accounted for about half its fourth-quarter revenue of $1.03 billion, was hit by a 20 percent rise in beer excise tax rates in Quebec and the National Hockey League lockout.

The brewer, known for its Molson Canadian and Miller Coors beers, said sales-to-retail (STRs) in Canada fell 7 percent.

Molson Coors said market share in Canada fell about one share point in the fourth quarter but that it did not expect a further decline as the NHL lockout ended in January.

"They had already flagged a lot of issues and in Canada there were big issues ... it looked pretty poor in the volume point of view," Nomura Securities International analyst Ian Shackleton said, adding that he expected volumes to normalize in 2013.

STRs in Canada increased in mid-single digit percentages in the first four weeks of the first quarter, Chief Executive Peter Swinburn said on an earnings conference call.

In the United States, STRs in the first four weeks of the first quarter were down in the low single digits, he said.   Continued...