Aug.21 - Weak demand, poor weather and government measures in Europe are casting a pall over Dutch brewer Heineken and rival Carlsberg, but growth in emerging markets continues. Ciara Sutton reports.
Two brewing giants, a mixed barrel of results. Heineken, the world's third largest brewer, reported higher first-half earnings than expected with a surge in profit in developing economies and tight control of costs in mature markets. The Dutch company says operating profit grew 5 percent - the same as a year earlier. The group, which brews Europe's best-selling Heineken lager, Sol, Tiger and Strongbow cider, has been hit hit by poor weather and economic stagnation in the region. Despite having a huge presence in the sluggish European market Heineken boosted its presence in emerging markets with its 2010 purchase of the brewing business of Mexico's Femsa and by taking full control of Asia Pacific Breweries. And the move appears to be paying off. It says operating profit in emerging markets grew by 7 percent and now makes up half of earnings for the group. In contrast Danish brewer Carlsberg fell below forecasts for operating profit and revenue in the second quarter after strong Asia growth failed to compensate for poor European markets. It kept its 2013 financial guidance unchanged but cut its Russia beer market growth outlook. Eastern Europe sales fell slightly in the quarter while revenue in Asia grew by 10 percent, once again below average forecasts.