MILWAUKEE (AP) ¿ An analyst on Wednesday initiated coverage of the world's biggest brewers, saying Anheuser-Busch InBev and SABMiller PLC are better positioned than rivals Carlsberg and Heineken because they are less exposed to recession-weary Europe.

Morgan Stanley analyst Michael Steib gave "Overweight" ratings to ABInBev, which formed last year when Belgian-brewer InBev bought Anheuser-Busch Cos Inc., and SABMiller, saying he preferred the world's two largest brewers because of their limited exposure to Europe and their greater exposure to the U.S., where drinking hasn't suffered much under the recession.

He gave Carlsberg an "Equal-weight" rating and Heineken an "Underweight" rating, since they do more of their business in Europe, where beer volumes are falling faster than in the U.S. as consumers cut back on their spending. About 7 percent of Heinken's earnings before interest and taxes are from the U.S., while ABInBev is at 40 percent and SABMiller is at 15 percent.

"We expect U.S. beer volumes to decline by only 2 percent in 2009 in contrast to some European markets where we see mid-to-high single digit declines," Steib wrote in a note to clients.

Consumers are changing their habits as they worry about their investments, jobs and home values and that will favor brands made by ABInBev ¿ such as Bud Light ¿ and SABMiller's U.S. unit, MillerCoors, maker of Coors Light and Miller Lite, the analyst wrote. Those brands, he wrote, "are perceived to be good value for money and consumers buy them out of habit."

On the other end of the spectrum, he said, are import beers like Heineken, Corona and Beck's. Import beers, he wrote, "are perceived as poor value for money despite strong taste and quality rankings and are thus more at risk of losing share during this downturn."

Just by holding their market share, ABInBev and SABMiller should be able to generate above-market average growth rates, he wrote. He assumes the industry will post 2.7 percent long-term growth, while ABInBev and SABMiller should be able to grow their operating profits by between 3.5 percent and 4 percent.

"This assumes that the companies see no improvement in efficiency, add no market share and make no incremental acquisitions," he wrote.

Carlsberg and Heineken should expect to see growth of about 2.5 percent to 3 percent. Steib said he was particularly skeptical of sales in Western Europe, including Britain, Germany, Italy and Spain.
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