SABMiller warns of cutbacks

By David Jones

LONDON (Reuters) - Brewing giant SABMiller (SAB.L) warned it is looking to cut back investment spending as a global economic slowdown hits beer drinking, after the group reported half-year earnings growth at the top end of forecasts.

The London-based maker of Miller Lite, Peroni and Pilsner Urquell beers also cautioned it will suffer from higher commodity costs for at least another year, while the recent strength of the U.S. dollar will dent future results.

"In these volatile and unpredictable economic times it is prudent to review or postpone some of our investment plans," Chief Executive Graham Mackay told a results conference.

He added that investment plans may be reviewed in areas showing slowing growth, such as its two biggest markets of South Africa and Colombia, and also central and eastern Europe as deteriorating economic conditions hit demand for beer.

However, business in other areas of the world such as the rest of Africa, Peru and Poland, was still growing while other markets such as the United States had been resilient, he said.

"In these very uncertain times the (different) rate of change in demand has been surprising between areas," he added.

SABMiller shares rose 0.72 percent to 912 pence by 9:33 a.m. in a marginally higher market. They have fallen from a January high of 14.63 pounds to a low last month of 758p to underperform the DJ Stoxx European food and beverage index .SX3P by 24 percent this year due to rising costs and currency concerns.

Mackay said that although prices for key inputs such as barley, aluminium and glass have recently fallen due to the company's forward hedging policy, it would not see a big effect from lower prices for another year or so.