Latest news with #alcoholindustry
The Sun
15-05-2025
- Business
- The Sun
Price of popular beer hiked in supermarkets including Sainsbury's and Morrisons
DRINKERS are feeling the pinch as prices of the popular Spanish lager have shot up in supermarkets across the country. The price of your favourite San Miguel has been steadily increasing since Budweiser Brewing Group (BBG) took over its production in January. 1 Single bottles have been hit hardest, rising by an average of 34p to a hefty £2.55, according to an investigation by The Grocer. Sainsbury's shoppers have seen the biggest jump, with prices going up twice since January, from £1.99 to a whopping £2.75. Morrisons isn't far behind, with a bottle now costing £2.50, up from £2.20. Multipacks are also affected, with a four-pack of cans now costing around £5.94. Even larger packs have seen a slight increase. So, what's behind the price hike? BBG blames "government-imposed duties and new packaging taxes," which they say have increased production and distribution costs. The brewing and pub industry is dealing with a slew of financial pressure, including a rise in employee national insurance contributions and fresh charges on waste packaging, which have added £1 to the cost of a 12-pack of beers. This follows a 3.6% increase in duty rates introduced in February. This hated levy is charged on all drinks with an alcohol by volume (ABV) strength exceeding 1.2%, either at the point of production or upon importation. Sainsbury's and Morrisons say a variety of factors are impacting prices. Asda declined to comment. However, it seems San Miguel has been struggling to keep its head above water. Sales have dipped since BBG took over, falling by a hefty 13.3% to £216.3million. Despite the price increases, BBG is trying to keep the Spanish spirit alive with a big marketing campaign, promising a "Spanish Summer – No Matter, Where," complete with TV ads, social media buzz, and pub giveaways. A BBG spokesperson said: "San Miguel remains a consumer favourite, and we look forward to activating it this year with exciting marketing and trade campaigns." Other popular beer brands have opted to reduce alcohol content as a way to minimise the impact of rising costs and avoid price increases. What brands have slashed alcohol content? Coors is dropping the alcohol level of its lager from 4% to 3.4% in the coming weeks, joining a growing list of brands watering down their booze. Earlier this year, Heineken dropped the alcohol level of its SOL brand drinks from 4.2% to 3.4%. Grolsch was cut from 4% to 3.4% last year, leaving fans furious. The beer, relaunched by Asahi in 2020 after being scrapped the year before, was previously sold at 5% ABV. Kronenbourg saw its alcohol content drop from 5% to 4.6%, with Carlsberg Marston's insisting it could still 'deliver great taste and quality' despite the change. Hophead, brewed by Asahi-owned Dark Star, also fell from 3.8% to 3.4% last year as part of a major revamp across the range. Banks Amber Ale was reduced from 3.8% to 3.4% in mid-2023 as part of a move to encourage 'moderation' among drinkers. John Smith's Extra Smooth, the UK's No.1 keg ale, had its ABV trimmed from 3.6% to 3.4% to support healthier drinking habits according to Heineken. Fosters, the Aussie-themed lager, had its alcohol level cut from 4% to 3.7% back in 2022 as part of Heineken's drive to meet demand for lower-alcohol drinks. What's happening at pubs? Last week, the boss of Wetherspoons warned the price of a pint will go up by 20p in the coming days as breweries are already pushing through hikes on the back of costs pressures from Labour's tax hikes. The pub industry had already faced demands for higher prices from breweries, which had increased their prices by around 7p per pint in the past week, Sir Tim Martin revealed. "It means pints in pubs are going to go up by on average 15p to 20p this month", he said. Despite this, Sir Tim said he won't be raising prices at his own pubs. The British Beer and Pub Association recently warned that the price of a pint is expected to exceed the £5 mark, up from the current average of £4.80. Simon Dodd, chief executive of Young's, announced plans to raise the chain's prices by 2.5% to 3%. Similarly, Stonegate Group, which owns popular pubs like Slug & Lettuce, Walkabout, and Popworld, increased prices by 4% for its leased and tenanted pubs on May 2. Meanwhile Heineken increased the price of its draught beer by an average of 2.97% for pubs in February. In January, Wetherspoons raised the prices of some drinks and meal deals by up to 30p. How can I save money at Wetherspoons? FREE refills - Buy a £1.50 tea, coffee or hot chocolate and you can get free refills. The deal is available all day, every day. Check a map - Prices can vary from one location the next, even those close to each other. So if you're planning a pint at a Spoons, it's worth popping in nearby pubs to see if you're settling in at the cheapest. Choose your day - Each night the pub chain runs certain food theme nights. For instance, every Thursday night is curry club, where diners can get a main meal and a drink for a set price cheaper than usual. Pick-up vouchers - Students can often pick up voucher books in their local near universities, which offer discounts on food and drink, so keep your eyes peeled. Get appy - The Wetherspoons app allows you to order and pay for your drink and food from your table - but you don't need to be in the pub to use it. Taking full advantage of this, cheeky customers have used social media to ask their friends and family to order them drinks. The app is free to download on the App Store or Google Play. Check the date - Every year, Spoons holds its Tax Equality Day to highlight the benefits of a permanently reduced tax bill for the pub industry. It usually takes place in September, and last year it fell on Thursday, September 14. As well as its 12-day Real Ale Festival every Autumn, Wetherspoons also holds a Spring Festival.
Yahoo
10-05-2025
- Business
- Yahoo
Should You Forget Constellation Brands? Why These Unstoppable Stocks Are Better Buys.
Constellation Brands will struggle if Trump's tariffs against Mexico remain in place. Coca-Cola and Philip Morris International are better insulated from trade war headwinds. Both stocks are also reasonably valued, and their dividends have higher yields than Constellation's. 10 stocks we like better than Constellation Brands › Constellation Brands (NYSE: STZ), which makes and sells more than 100 brands of beers, spirits, and wines, is often considered a dependable consumer staples stock. It's one of the world's top producers of alcoholic beverages, and it has raised its dividend annually for 10 straight years. But over the past 12 months, Constellation's stock tumbled by nearly 30% as it grappled with three existential challenges: Younger consumers are drinking less alcohol. Waning demand for its cheaper wine brands. President Donald Trump's tariffs against Mexico will make it much more expensive to produce and import its leading Modelo, Corona, and Pacifico beers. For its fiscal 2026 (which will end in February 2026), Constellation expects its organic sales to be close to flat and anticipates an earnings per share decline of 8% to 11%. Management is trying to stabilize the overall business by divesting it of its cheaper wine brands, expanding its premium wine brands, and selling more non-alcoholic beverages -- but those efforts probably won't fully offset the pressures created by Trump's trade war. Constellation's stock looks cheap at 14 times forward earnings, but its forward yield of 2.2% probably won't be enough to attract serious income investors. So instead of Constellation, such investors might want to check out two better consumer staples stocks: Coca-Cola (NYSE: KO) and Philip Morris International (NYSE: PM). Both soda consumption and smoking rates are declining worldwide, so it might not seem smarter to invest in Coca-Cola or Philip Morris International (PMI) instead of Constellation. However, Coca-Cola and PMI actually tackled their existential challenges a lot earlier than Constellation. Over the past few decades, Coca-Cola developed and acquired more brands of bottled water, teas, fruit juices, sports drinks, energy drinks, dairy products, coffee, and even alcoholic beverages to curb its dependence on sales of its carbonated drinks. It also refreshed its flagship sodas by offering them in different ways, with smaller serving sizes, new flavors, and sugar-free versions. PMI was spun off from Altria in 2008. After that split, Altria kept the U.S. market while PMI sold its tobacco products everywhere else. PMI initially focused on expanding its sales in countries with higher smoking rates and lighter regulations, but over the past decade, it has somewhat pivoted away from cigarettes with its iQOS products, which heat tobacco instead of burning it. It also launched more smoke-free products like snus, e-cigarettes, and Zyn nicotine pouches. As a result, PMI generated 42% of its revenue and 44% of its gross profit from its smoke-free products in the first quarter of 2025. Like all other tobacco companies, PMI has also been steadily raising its cigarette prices to offset the impact of declining sales volumes on its finances. Constellation generates most of its revenue in the U.S. market, but most of its top-selling beer brands are still produced in Mexico. Therefore, Trump's 25% tariff on imports from Mexico, which went into effect in March, will drive up the prices U.S. consumers will have to pay for those beer brands. That will doubtless throttle Constellation's earnings in the near term. Coca-Cola is better insulated from the tariffs because it only sells the concentrates and syrups for its beverages. The production, distribution, and sales of the finished beverages are handled by independent regional bottlers. These bottlers will need to deal with higher tariffs on aluminum, but they plan to pivot toward more plastic bottles to mitigate that impact. The diversification of its supply chain across more than 200 independent bottlers worldwide gives Coca-Cola many more ways to counter the impact of tariffs on its bottom line than Constellation has. PMI is also protected from those tariffs because it produces and sells almost all of its products overseas. It has only launched a few of its smoke-free products in the U.S., and it has been expanding its domestic manufacturing facilities (particularly for Zyn) to avoid getting hit by new tariffs. Over the past 12 months, Coca-Cola's stock rallied 15% and PMI's stock rose nearly 80%. Yet both stocks are still reasonably valued. Coca-Cola trades at 24 times forward earnings and pays a forward yield of 2.9%, while PMI trades at 23 times forward earnings with a forward yield of 3.1%. Both stocks might seem pricier than Constellation, but they're clearly safer investments that pay higher dividends. Both companies also expect to keep growing despite tough macroeconomic conditions. For 2025, Coca-Cola expects its organic sales to rise by 5% to 6% as its comparable EPS grows by 2% to 3%. PMI expects its organic sales to rise 6% to 8% as its adjusted EPS grows by 12% to 14%. Neither Coca-Cola nor PMI is an exciting investment, but they're safe places to park your cash in this unpredictable market. They're also better insulated from tariffs and other macro headwinds than Constellation and other less diversified companies in the consumer staples sector. Before you buy stock in Constellation Brands, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Constellation Brands wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $623,103!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $717,471!* Now, it's worth noting Stock Advisor's total average return is 909% — a market-crushing outperformance compared to 162% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 5, 2025 Leo Sun has positions in Altria Group. The Motley Fool recommends Constellation Brands and Philip Morris International. The Motley Fool has a disclosure policy. Should You Forget Constellation Brands? Why These Unstoppable Stocks Are Better Buys. was originally published by The Motley Fool Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
