Amid declining beer sales in the United States, financial analysts at UBS have downgraded Molson Coors from a “Buy” rating to “Neutral.”
Molson Coors took a pretty hard hit in the third-quarter having a 23% decline in profit.
Unemployment among their core customers is one factor for the decrease in sales and, thus, the downgrade, but the UBS analyst makes a more important point:
He said that even if employment trends improve, domestic beers like the company’s Miller Lite brand are losing market share to specialty craft beer, imported beer and wine and spirits.
Just take this fact as indicator: While Molson Coors has declined 23% in the third quarter, craft beer sales increased by 15% in the first half of 2011 (more recent data isn’t available yet).
Also, there were 1,927 breweries operating in the U.S. in 2011, which beats 2010′s record year. The more breweries the more competition for the big guys.
More competition equals more choice, which is always a good thing for consumers.
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