The Asian division that Anheuser-Busch InBev NV partially spun off to investors with the promise to tap into the growth of China, now weighs on the performance of the world's biggest brewer.
In early European trade, AB InBev fell as much as 11 percent, the steepest decline in more than a year. A drop in China and the U.S. beer shipments caused profit growth to stumble in the third quarter.
The company has lowered its full-year earnings forecast, saying it expects "moderate" earnings on Friday, down from "strong" earlier.
The findings present a souring image of trust in Asian customers and may suggest more trouble ahead as China's economy has cooled to the lowest rate since the 1990s.
AB InBev's report highlights a recent pattern, with China's demand for drinks such as Pernod Ricard SA's Cognac and Nestle SA and Unilever's mass-market consumer items weakening, while fashion giants Hermes International and LVMH continue to enjoy strong growth on the world's key luxury market.
AB InBev's results are stable on an adjusted basis, with forecasts of 3 percent growth. New restrictions on the selling of alcoholic beverages in China after 2 a.m. have weighed heavily on the business. The earnings growth of AB InBev declined from 24 percent in the second quarter to 11 percent.
The firm said the image is not so grim as its highest-priced beverages in China, like Corona, boosted deliveries by more than 10 percent.
Last year, Heineken NV acquired a $3.2 billion interest in China Resources Beer Holdings Co., the country's best-selling Snow beer producer. Carlsberg A/S also performed well in China, where, even as the overall market shrank, its sales grew 19 percent in the first quarter.
The advent of soft seltzers in the U.S. is eroding beer consumption, so the business is growing to products like Bon & Viv and a forthcoming Bud Light Seltzer in that market.
Higher raw material costs, scheduling of deliveries, unfavorable currency fluctuations and volume decreases in South Korea and Brazil were other variables that affected the brewer in the period.
In the Asian country, the brewer reversed price increases after turning customers back. Brazil's profits dropped by 17 percent.
AB InBev said correlations are more difficult in the second half of 2019. Most marketing spending in the first half last year was linked to the World Cup soccer games, while it has more spread this year.
