Beer makers are increasing prices, focusing on profit growth at the expense of market share
Both U.S. giants have reported strong profits this year, in part by raising prices to offset flat volumes. MillerCoors’s adjusted income rose 27% in the first six months of this year from a year ago.
The beer makers still stand to make more profit even if they follow through with another 4% price increase.
For instance Annheuser-Busch/InBev has a EDITA margin of 34.7%. If they increased prices by 4%, their sales have to fall more than 10% before the price increase delivers a loss from fall in sales.