Forbidden Donut

MILWAUKEE — Cash-strapped drinkers are starting to trade down to economy beers, the chief executive of Miller Brewing Co. said Thursday.

The Milwaukee-based brewer saw some shift between higher-priced, premium beers and economy beers such as Miller High Life and Milwaukee's Best starting in January, Tom Long told reporters on a conference call.

"We think it's primarily driven by decline of disposable income and pocket money that American consumers are feeling right now," he said.

Long said the volume of beers sold remains stable, but the company expects to sell more lower-priced beers this year if gas prices continue to rise.

Americans also are spending less in bars and restaurants, and Long said Miller is seeing declines in sales to those businesses.

Miller's parent, London-based SABMiller PLC, announced Thursday its full-year profits rose 22.7 percent and the growth rate for lager volumes doubled.

In the U.S., Miller's revenue rose 4.8 percent to $5.1 billion. Earnings before interest, taxes and amoritization rose 27 percent to $477 million, though that includes a gain of $33 million from a settlement of a dispute.

Sales of flagship brand Miller Lite was up 1.1 percent, as were sales of Miller High Life. That brand's performance, on the strength of its humorous ad campaign urging people to "Take Back The High Life" reversed a three-year decline.

But other brands didn't fare so well. Miller Geniune Draft's sales were down 10.6 percent, as the domestic premium brand continued to struggle. Economy brew Milwaukee's Best also saw declines.

SABMiller did not break out fourth-quarter results. The brewer, the world's third-largest, said overall revenue was up 15 percent to $21.4 billion.

Long didn't offer any new information about the proposed joint venture between Miller and Molson Coors Brewing Co. That awaits governmental approval.

Miller, the nation's second biggest brewer, and Coors, the third biggest, say the pairing — to be called MillerCoors — will help them better compete against industry leader Anheuser-Busch.