More gas money means less pocket change for a bottle of beer
Beer and gasoline often mix in retailing -- but industry observers say high gas prices could break up the pair.
Analysts caution that the post-Hurricane Katrina gas price volatility doesn't bode well for the beer industry on two counts.
First, the escalating price of gasoline is pressuring companies on the back end of their business by boosting their utility bills and hiking transportation costs.
Most beer companies don't directly distribute product to retail outlets, said UBS analyst Nik Modi. Instead, a bulk of the distribution is done by independent distribution companies.
But beer companies still get hit with the gas price inflation. Explained Modi, "Anheuser-Busch operates 13 facilities in the United States. They do run their own delivery fleet to transport goods from the plants to these distribution companies."
External Source - For the complete article click here
Source - USATODAY
First, the escalating price of gasoline is pressuring companies on the back end of their business by boosting their utility bills and hiking transportation costs.
Most beer companies don't directly distribute product to retail outlets, said UBS analyst Nik Modi. Instead, a bulk of the distribution is done by independent distribution companies.
But beer companies still get hit with the gas price inflation. Explained Modi, "Anheuser-Busch operates 13 facilities in the United States. They do run their own delivery fleet to transport goods from the plants to these distribution companies."
External Source - For the complete article click here
Source - USATODAY
