BEVERAGES You better be careful!

At the start of the year, brewers have been increasing prices for the COGS price pressures that were building up into 2020 but they have not done so yet for those as a result of the Russian invasion of Ukraine. Even in developed markets we are expecting a second round of price increases starting 1 July and it remains to been seen how consumers will react to that. There are already the first signs of consumers becoming more price sensitive in their shopping habits and in some countries (e.g. France) retailers have been difficult to deal with. It is all likely to paint a hesitant picture on H1/Q2. We believe that the stock that is likely to prove more resilient is AB InBev, which has low exposure to Europe (5% of revenues) and already better cost culture and higher margins allowing for a less severe impact.