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Heineken warning on consumer confidence knocks drinks stocks

A warning from Dutch brewer Heineken that bad summer weather across Europe and depressed consumer confidence would hit profits has knocked shares of UK drinks giant Diageo, brewer SABMiller and ice cream maker Unilever.

One brewing analyst said Heineken’s statement represented an “implicit profit warning of at least 15%”.

Diageo shares were the the third-biggest faller on the FTSE 100 index this morning, dropping 27p, or 2.4%, to £10.95. Unilever lost 24p, or 1.2%, to £20.19 while SABMiller slipped 22p, or 1%, to £20.65.

“There is no getting away from the fact that July has been disappointing in terms of the weather,” said Mark Brumby, leisure analyst at Langton Capital, adding there was a read-across from Heineken to other brewers and drinks companies.

He added that Unilever would also be affected, saying: “You should always sell Unilever when the sun goes in and buy when the sun goes out – it’s seen as an ice cream stock.”

Brumby said the sharp fall in Germany’s Ifo index – a key gauge of business confidence – was also not helping. It cast doubt on whether Germany would continue to be the engine of growth in the eurozone. Europe’s largest economy already slowed down in the April to June period, growing by just 0.1% – even less than the UK at 0.2%. © Guardian News & Media Limited 2011 | Use of this content is subject to our Terms & Conditions | More Feeds