SABMiller, the world’s second biggest brewer, said organic volume growth was up 3% over the last 11 months but that integration costs and higher marketing spend would nit profits.

The maker of Castle lager, Miller Lite and Pilsner Urquell noted that sales to retailers to February 2004 were down 2.7% compared with the nine-month decline of 3.4% to December 2003. And added that increased sales of its Miller Lite lager were offset by weaker performances of its other brands.

In Europe volumes rose 8%. But SABMiller said integration costs of its Italian brewer Peroni would hit profitability, as would “significant investment” behind its brands and in particular the launch of Miller Genuine Draft.

In Central America, beer volumes were up 4%, whilst sales of carbonated soft drinks fell 4.5%.

In Africa and Asia organic volumes of lager rose 3%.

SABMiller said beer South Africa saw volumes rose 3%, with carbonated soft drinks up 7%.