* Issues tepid beer volume forecast for 2010
* Analysts worry if beer is still "recession-proof"
* Q4 adj EPS $1.02; Street view $1.10
* Worldwide beer volume down 4 percent
* Shares fall 3.2 percent (Updates shares to closing price; Adds byline)
By Dhanya Skariachan and Martinne Geller
NEW YORK, Feb 9 (Reuters) - Retail pundits who spread the "beer is recession-proof" theory might want to take a closer look at brewer Molson Coors' (TAP.N) results.
On Tuesday, the brewer of Coors Light and Molson Canadian reported a lower-than-expected quarterly profit on weak sales volume across all markets and issued a tepid volume forecast for 2010, sending its shares down 3.2 percent.
Molson Coors was also weighed down by cost inflation in the United States and Britain.
The cost of goods sold per hectoliter increased 5.6 percent from the year-earlier period, hurt by increases in brewing and packaging material costs, including glass and aluminum, the company said.
"Things were worse than we expected in the fourth quarter and that seems to have been impacted mainly by the level of unemployment," Molson CEO Peter Swinburn said in an interview. "If people haven't got the money they can't spend it."
Swinburn added that an overall slowing of the beer market seen in the fourth quarter continued into the first couple weeks of January.
"Looking to 2010, we expect volume to remain challenging, especially in the first half," Swinburn said.
Some analysts raised concerns about the beer consumption trends in the United States, especially since beer's relatively low price had formerly made many consider it somewhat resilient in the downturn.
"What we have seen was that really low-end value brands were growing quite a bit because consumers were trading down. Surprisingly, the entire U.S. beer universe volumes fell 2.5 percent in 2009," Morningstar analyst Ann Gilpin said.
"That just goes to show how deep this recession is," she said.
Molson shares, which had fallen about 9 percent year to date, closed down $1.33 at $39.98 on the New York Stock Exchange.
Despite the stock's "reasonable" valuation that was at the low end of its global peers, Morgan Stanley's Dara Mohsenian rated it at "equal-weight."
"The stock lacks fundamental catalysts here, with weak US beer industry volume trends and a tenuous Canadian pricing environment," he said in a note.
Swinburn said he was comfortable with the pricing environment moving forward, noting that price increases recently taken in the United States were in line with inflation.
In the latest fourth quarter, Molson Coors earned $222.1 million, or $1.19 a share, compared with $93.7 million, or 51 cents a share, a year earlier.
Excluding items, profit was $1.02 a share, missing analysts' average forecast of $1.10, according to Thomson Reuters I/B/E/S.
Sales excluding excise taxes rose 11 percent to $820.8 million. Worldwide beer volume declined 4 percent as consumers remained cautious in the weak economy.
Earlier on Tuesday, MillerCoors, the combined U.S. operations of Molson and SABMiller PLC SAB.L, reported a 21.6 percent slide in fourth-quarter net income reflecting a tough economy and a sharp rise in share-based salary bonus packages.
"It's tough out there, and we saw the effect of ongoing economic pressure and unemployment on beer sales, especially in the fourth quarter," MillerCoors CEO Leo Kiely said in a statement. [ID:nLDE6180OJ] (Reporting by Dhanya Skariachan and Martinne Geller, editing by Dave Zimmerman, Bernard Orr, Leslie Gevirtz)