J. Frey: European beverage manufacturers may be indirectly affected by conflicts in the Middle East.

Analysts at Jefferies wrote in a client report that European beverage manufacturers may be impacted by the chain reaction of the conflict in the Middle East. Jefferies pointed out that companies like Coca-Cola HBC and Diageo, the manufacturer of Guinness beer, have a small percentage of their sales revenue coming from the war-torn region. However, these analysts said that the conflict-induced surge in oil prices will impact the manufacturing costs and indirect costs such as transportation for these companies. Jefferies stated that wars often dampen consumers' enthusiasm for beverage consumption. "If the inflation narrative resurfaces, this could lead to a squeeze on disposable income, and given the non-essential nature of alcohol, this will put pressure on demand prospects."