Brewer SABMiller PLC (SAB.LN) Friday reported flat sales volume for its fiscal first quarter as the economic downturn weighted on consumer demand, particularly in Eastern Europe, and said its financial performance for the quarter was in line with its expectations.

SABMiller, the world's second-biggest brewer by volume after Anheuser-Busch Inbev NV (ABI.BT), said its core lager volume, which strips out the effect of acquisitions and disposals, was flat in the quarter ended June 30 from a year earlier, in line with expectations.

That compares with a 1% fall in the fourth-quarter of fiscal 2009 and third-quarter.

"The global economic slowdown has continued to dampen consumer demand, although the impact on volumes has varied between our markets," Chief Executive Graham Mackay said in a statement.

"Across the group, revenue benefited from firm pricing in the prior year, and we continued to focus on cost efficiencies and, in certain markets, restructuring activities in order to reduce our cost base," he said.

While SABMiller's trading update was in line with expectations, the brewer's performance in Eastern Europe was disappointing, said a London-based analyst, who didn't want to be identified.

Core lager volume was down 7% in Europe as "household debts, tighter credit controls and rising unemployment continued to depress consumer spending", resulting in beer market contraction across the region, according to SABMiller. In Poland and Russia, core lager volume was down 8% and 9%, respectively.

In the U.S., the company's MillerCoors LLC venture with Molson Coors Brewing Co. (TAP) reported a 0.8% fall in sales from distributors to retailers. SABMiller said premium light brand volumes were down slightly in the first-quarter, with a "mid-single digit" decline, in percentage terms, in Miller Lite volume. This was partly offset by "low single digit growth" of Coors Light and accelerated growth of MGD 64.

Core lager volume in Africa and Asia rose 11% in the quarter versus weak comparable figures for China. In the first-quarter of last year, consumer demand in China was hurt by the Sichuan earthquake.

Soft drinks volume rose 2% in the first-quarter, driven by strong sales in Africa.

At 1122 GMT, SABMiller shares were down 20 pence, or 1.4%, at 1377 pence in a steady London market. The shares have risen 18% since January on hopes brewers can weather the economic storm amid easing cost pressures and strong summer weather.

SABMiller also said that Howard Willard, executive vice president, strategy and business development at Altria Group Inc. (MO), will join its board as a non-executive director, effective Aug. 1. Willard has been nominated under the terms of an agreement with Altria as part of the Miller Brewing Co. transaction in 2002.

The London-based company, which counts Grolsch, Peroni Nastro Azzurro, Castle Lager and Pilsner Urquell among its brands, is holding its annual shareholder meeting Friday.

SABMiller warned in May that there was very little visibility as to the timing of any recovery, as the global recession subdued demand across its markets.

The company has suffered as consumers, particularly in Europe, cut back on drinking during the economic downturn.

Company Web site: www.sabmiller.com

-By Michael Carolan, Dow Jones Newswires; 44-20-7842-9278; michael.carolan@dowjones.com