The latest sales update from SABMiller PLC (OTC: SBMRY) demonstrates why the company has partnered with Molson Coors to form MillerCoors. In the relatively flat U.S. market, SAB will look to the cost savings of shared operations to sweeten its earnings. SABMiller's North American sales in the first half of 2007 have risen only 1.4%, when the impact of the recent purchases of Sparks and Steel Reserve are backed out. Its Miller Light product fared slightly better, recovering from the damage inflicted in the U.S. market by Anheuser-Busch's (NYSE: BUD) earlier price drop to finish up 2.1% in the first half of this year. New products including Miller Cheleda and Leinenkugel are performed well.

Internationally, the company is looking to the success of new brands such as its popular Hanza Marzen Gold in South Africa to offset the blow of losing the brewing and distributing rights to Heinken's Amstel brand in that country. SAB's growth in Central and South America continued to be strong, up 8% in the second quarter. The Africa and Asia markets, which accounted for 12% of the company's EBITA last year, were also up by 20%, led by a 22% increase in China.

After warning in May that it would fall short of expectations in the second quarter, Anheuser-Busch Companies, Inc. (NYSE: BUD) surprised the analysts by posting a strong performance [pdf]. It reported a net sales increase of 6.1% and an increase in diluted earnings per share of 7.4%. The EPS of $0.88 exceeded the $0.87 projection of analysts polled by Thompson Financial.

Unlike first quarter results, this quarter showed strong sales in the U.S. as well as internationally. U.S. beer sales volume was up 2.3%, due in part to the success of import brands that the company distributes. This and price increases resulted in a 3.1% increase in revenue.

International sales continued to grow, up 4% due primarily to China, Canada and Mexico, partly offset by soft sales in Great Britain. Anheuser-Busch branded products grew 2.2% in volume worldwide.

The performance of Anheuser-Busch's entertainment sector, e.g. Busch Gardens, was up over $5 million as well, due to increased attendance and pricing.

The bottom line was moderated by increasing production and marketing costs, the latter a sign that the beer market continues to mature.

Anheuser-Busch's stock has been complicated by speculation by Citigroup that the company will eventually merge with InBev within the next two years.