Price increase is brewing for Budweiser family of beer

Anheuser-Busch Cos. thinks consumers are more than willing to pay a little extra for beer.

The nation’s biggest brewer will continue raising prices to counter a rise in the cost of ingredients, Chief Financial Officer W. Randolph Baker told a group of stock analysts at a conference Thursday in New York.

Baker said consumers have accepted price increases on most products in 2007, sustaining profits for the maker of Budweiser, Bud Light and Michelob.

“Our object for the year was to find a way to cover (cost increases), and we did – but just barely,” Baker said. The cost of agricultural commodities like hops and barley has risen steeply, Baker said.

Baker highlighted a bright spot for Anheuser-Busch – an apparent increase in consumer interest for domestic beers. Last year, beer industry shipment volume grew 2.1 percent, he said, the best annual performance since 1990. he said beer industry growth in 2007 has continued to exceed expectations, up 1.8 percent to date.

“We see the resurgence in interest in beer. With the momentum there, it’s likely you’re going to have strong demand for beer,” Baker said.

Warner Music Group Corp.‘s latest financial results reflect the dilemma of the recording industry as CD sales remain in free-fall and digital sales fail to offset those declines.

The New York-based recording company, home to acts such as Green Day and Linkin Park, disclosed Thursday that its fourth-quarter earnings slipped 58 percent amid a decline in CD sales, particularly in some international markets.

For the third year in a row, the company closed out its fiscal year with an annual drop in physical sales – the company’s principal revenue source – amid increases in digital music revenue.

Microsoft Corp.’s Windows XP operating system is about to get faster and Windows Vista isn’t, according to a report that caused a stir online this week as industry watchers speculated that a zippier XP could keep customers from upgrading to Vista.

Microsoft, however, said it’s too early to evaluate the two service packs it plans to release next year.

Early versions are already in the hands of testers like Devil Mountain Software Inc., which helps big financial services companies track trading-floor computer performance.

Vista SP1, due out in the first quarter of 2008, barely improved the operating system’s performance.