SABMiller, the world's second-biggest brewer, yesterday reported a 7 per cent jump in lager volumes over last year but gave warning that rising raw material costs would continue to feed through to higher prices.

The group, whose brands include Peroni Nastro Azzurro and Pilsner Urquell, said that although the soaring packaging costs of the past two years were now “in the base”, droughts and poor harvests meant that brewers were also having to cope with sharply rising prices for barley and hops.

The company increased beer prices by an average of 4 per cent in the year to the end of March, although there were big geographical variations and it benefited from an increasing shift towards premium brands.

One of the biggest price increases - about 15 per cent - was in China, although Graham Mackay, the chief executive of SABMiller, said that it was the first rise there “in living memory”.

He said that in the UK, which accounts for a tiny proportion of group volumes, pricing on Peroni Nastro Azzurro had “remained firm” as the company sought to protect its premium image in the face of supermarket discounting.

The price of a pint went up by more than 10p after the Budget duty increase and Mr Mackay said that in many London bars the beer was selling for £4 a pint. Peroni volumes in the UK rose by 39 per cent last year.

He said that he was pleased with the 4 per cent increase in pricing in the United States, which he claimed was double that achieved by Anheuser-Busch, the market leader.

SABMiller, which recently acquired Grolsch, the Dutch brewer, reported a 16 per cent rise in full-year profits before tax to $3.26billion (£1.67 billion), from revenues up 15 per cent at $21.4 billion.

Mr Mackay said that he remained positive about the group's trading prospects, partly as a result of its bias towards developing markets, although he gave warning that volume growth in the first half would be hit by difficult comparatives and continuing cost pressures.

The SABMiller boss confirmed that the group had taken a serious look at Scottish & Newcastle before its eventual sale last month to Heineken and Carlsberg.

He admitted that the leaking of its interest had been a contributory factor in its sudden withdrawal, although he said that the high price had been the main issue. “It was a very difficult deal to complete the circle on.”

Shares of SABMiller rose by 46p to £12.49 as the market welcomed the resilience of its performance compared with some of its biggest rivals.

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