Citi sees no price rollback risk for European brewers

Royal Unibrew A/S

15/05/2023 08:45

** Citigroup says that although price rollback concerns are
gaining pace in staples, beer should be able to resist them
unlike other consumer packaged goods
    ** The broker sees no price rollback threat for beer, with
fragmented route-to-market, absence of private label, and recent
limited retail CPI in beer lowering the risk
    ** European beer has successfully offset a 30% cumulative
cost-of-goods-sold (COGS) inflation through revenue management,
Citi says 
    ** It adds that while hedging means the industry faces
ongoing COGS-driven margin pressures through 2023, headwinds are
set to become tailwinds in 2024
    ** Citi raises Carlsberg  CARLb.CO  to "buy" from "neutral"
and Royal Unibrew  RBREW.CO  to "neutral" from "sell"
    ** It keeps "buy" on Heineken  HEIN.AS  and AB InBev
 ABI.BR  but raises their target prices
    ** With strong revenue-per-hectoliter development and
ongoing cost efficiencies, Heineken remains Citi's top pick
    ** Shares in Royal Unibrew and Carlsberg rise 2.2% and 1.2%,
respectively, among the top performers on the Copenhagen
blue-chip index  .OMXC20  

 (Reporting by Elviira Luoma)
 ((Elviira.luoma@thomsonreuters.com))