Scottish & Newcastle - the UK's biggest brewer - yesterday claimed more of the UK beer market, but is worried that drinkers may not celebrate the run-up to Christmas as lavishly as in previous years.
The group said the 5.6 per cent growth in volumes of its beer and cider brands between July and September was faster than a UK market that only expanded by an estimated 1.8 per cent.
Volumes of its top four brands - Foster's, Kronenbourg, John Smith's and Strongbow - were ahead of the 5.5 per cent growth in the first half of this year, even though consumers were tightening their belts as economic conditions worsened.
S&N said the underlying market in the UK remained soft and the biggest impact was being felt in pubs and restaurants, with on-trade sales shrinking compared with a year ago.
This was compounded by concerns that supermarkets and other retailers will slash the prices of alcoholic drinks during the festive season as competition in the sector intensifies.
"Despite the good performance in the year-to-date we are conscious of the weak demand trends in the on trade and retail pricing pressure in the off trade and the potential effects in the run-up to Christmas," S&N said.
The company is spending more on advertising and promoting its products in the UK this year, but assured investors that it was continuing to keep a tight control of costs.
Savings are on track to reach #60 million by 2007 and partly reflect the benefits of closing historic breweries at Edinburgh and Newcastle.
Problems facing the UK consumer were mirrored elsewhere in its major markets across western Europe, S&N said.
An improvement during the third quarter in France did not persuade S&N executives that there had been a change in consumer behaviour or economic conditions.
S&N said the French market was likely to remain difficult this year and beyond, but it was taking action to boost its performance.
"Despite the weak consumer confidence and cost pressure from increasing oil prices we are confident that we will meet market expectations for 2005," S&N said.