Brewing giant SABMiller sold less beer than expected in the first three months of 2009 as economic conditions worsened and demand fell in most of its markets, sending its shares lower in early trade.

The London-based owner of the of the Miller Lite, Peroni and Grolsch brands said on Thursday that worldwide underlying beer volumes fell 1 percent in its fourth quarter to end-March, missing average analysts expectations for a 0.8 percent rise.

Economic conditions deteriorated in the second half and consumer demand has fallen in most markets, particularly in the fourth quarter, the group said in a trading update.

SABMiller shares dipped 2.4 percent to a low of 10.38 pounds in early trade before steadying to trade off 1.3 percent at 10.49 pounds by 4:00 a.m. EDT. The shares have narrowly outperformed the FTSE 100 index <.FTSE> by 2 percent so far this year.

With economic conditions in several key markets having deteriorated in Q4, and unlikely to improve this year, the volume outlook is poor and SABMiller's ability to increase prices perhaps constrained, said analyst Matthew Webb at brokers Cazenove.

The brewer which earns nearly 90 percent of its profits from emerging markets like South Africa, Colombia, Poland and China said its financial performance was hit by currency movements as the dollar strengthened against many emerging currencies.

However, the brewer, second largest in the world after Anheuser-Busch InBev , offset this by pushing through price rises and said its financial results for the year to end-March remained in line with its own expectations.

Overall beer volumes for the 12 months to end-March rose 2 percent, but were flat on an underlying basis after stripping out the effect of acquisitions.

The group, which also brews Castle, Snow, and Pilsner Urquell beers, said annual underlying volumes rose 1 percent in Latin America and by 4 percent in its Africa and Asia region, but were flat in Europe and dipped 2 percent in South Africa.

In the United States, where it formed the MillerCoors joint venture in July 2008, sales to retailers fell 0.4 percent in the nine months to end-March with 0.4 percent growth seen in the January-March quarter.

(Reporting by David Jones; Editing by John Stonestreet and Simon Jessop)