Consumers bought less beer made by Molson Coors in its third quarter, but profit rose 37 percent because of price increases and cost savings from the company's joint venture in the U.S.

Molson Coors said it raised prices across its major markets but discounted some prices to compete, which some analysts took as a sign that the higher prices might not be sticking. It also credited better cost controls for the increase in profit.

Despite the profit boost, shares tumbled Wednesday, with some analysts citing concerns about consumers spurning beer in the wake of price hikes. Others said a tax gain that helped the company beat estimates in the quarter was not likely to be repeated.

Shares fell $3.55, or 7.2 percent, to $45.85 on heavy volume late Wednesday.

The worldwide volume of beer sold slipped 2.9 percent in the quarter, reflecting the continuing trend of consumers holding back on their spending amid the recession _ and in the face of price hikes by brewers. This has led to volume drops for key Molson Coors markets like Canada and Britain.

One way to stimulate sales would be to lower prices. But Molson Coors CEO Peter Swinburn said the brewer is more interested in protecting its brands for future growth. So while the brewer is discounting some of its products in competitive markets like Canada, for the most part it is holding the line on prices.

Molson Coors and other major brewers have been raising prices, saying they must cover rising costs for key ingredients used to make and transport their beer. Swinburn said the company won't back down on prices, which he said would confuse consumers and erode brand value.

"We try and be consistent in what we say and do irrespective of what the economy is doing and what the markets are doing," he told The Associated Press in an interview.

Stifel Nicolaus analyst Mark Swartzberg said results in the quarter show that consumers are trading down to less expensive products, which aren't as profitable.

Still, he rates the stock a "Buy" and said that even amid all the pressure, Molson Coors is mostly holding firm on price.

"Industry shipment declines are a concern, but we believe management and its largest competitor _ Anheuser-Busch InBev _ are demonstrating an unwillingness to press the panic button by stepping up promotions to drive volumes," he wrote.

The maker of Coors Light, based in Denver, earned $235.3 million, or $1.26 a share, in the period ending Sept. 30, up from $171.3 million, or 92 cents a share, last year. Net sales at Molson Coors Brewing Co. fell 7.3 percent to $853.7 million. Continued...