Aluminum Cost Headwind for Molson Coors?

Analyst sees brewer taking a hit in 2007.

Molson Coors costs of goods sold could rise by 3.6 percent next year on higher aluminum prices, according to a recent report by BernsteinResearch.

The investment research firm expects Molson Coors is going to be hit by market prices for aluminum next year when existing price caps expire. The 3.6 percent estimated increase is based on aluminum prices remaining at current prices. The report predicts COGS rising by 4.5 percent overall.

If aluminum and diesel prices hold steady, Molson Coors would have to bump up pricing by 2 percent to offset higher input costs, the report said.

Meanwhile, BernstreinResearch’s beer market analysis suggests that Anheuser-Busch is better positioned as it expects A-B to “benefit from aluminum price caps into 2007.” It predicts COGS per case to grow by a “modest’ 1.5 percent.

The report -- which did not look at Miller Brewing Company -- predicted U.S. beverage companies will face mounting commodity pressure in 2007. Food companies are expected to face a more favorable environment.