Major brewers including AB InBev and Molson Coors have not only revised but totally scrapped their outlook for 2020 as a result of the coronavirus outbreak and the slowdown of public life and its effects on beer sales.
At the end of February, when the coronavirus crisis was mainly confined to China, AB InBev already said that core profit (EBITDA) would decline by 10% in the first quarter and by between 2 and 5% for the full year.
“Since 27 February 2020, the scale and magnitude of COVID-19 has increased significantly, resulting in restrictions imposed on many customers, as well as other limitations and social distancing measures in many countries in mid-March,” the company said on Tuesday.
“Given the uncertainty, volatility and fast-moving developments of the pandemic in the markets in which AB InBev operates, the company is withdrawing that 2020 outlook in its entirety because of the impact of COVID-19,” AB InBev said.
Last month, AB InBev already announced that its CEO Carlos Brito will not receive a bonus for the second half of 2019. “Our performance in 2019 was below our expectations, and we are not satisfied with these results," Brito said. Still, "we do not believe this crisis will impact the long-term potential of our business," Brito noted at that time.
On Friday also Molson Coors withdrew its financial outlook for 2020 and beyond. A former outlook was provided on February 12, 2020 but became obsolete due to the uncertainty regarding the impact of the COVID-19 pandemic.
It is expected that other major brewers will follow soon to scrap their 2020 outlook as the coronavirus outbreak has now spread around the world and its effects can be seen everywhere. Despite the fact that China has already started to loosen the strict exit restrictions in the Wuhan province where the outbreak started earlier this year, the peak of the crisis does not seem to be reached and a clear statement of the economic effects cannot be made yet.