Quantcast
Home » News
Home » News

Drop in Russian beer sales hurts Carlsberg

Published August 20, 2014 10:08 am

Exports • Beer consumption down 7 percent in Russia, 10 percent in Ukrainian market.
This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Copenhagen • Beer sales in Russia, Ukraine and other Eastern European countries are down and expected to keep falling as political tensions weigh on the region's economy, brewer Carlsberg said Wednesday.

The Danish company owns a range of brands across the world, including Baltika Breweries, based in its vast Russian market. Consumers there are drinking less due to uncertainty about the country's economy, which some experts estimate is sliding into recession.

Beer consumption dropped 7 percent in Russia and 10 percent in Ukraine, where Moscow is accused of supporting a militant separatist rebellion. Adding to Ukraine's market woes was a 43-percent increase in the beer tax as the government there tries to steady its public finances.

Carlsberg said its Eastern European markets overall are "increasingly challenging and uncertain," and expects them to deteriorate further in the second part of 2014 especially with more consumption declines in Russia and Ukraine.

The Copenhagen-based group said that "regardless of the challenging Russian macro-economy, we kept investing in our brands and maintained a high level of commercial activities to drive value and volume in the region."

The uncertainty kept a lid on sales growth, with Carlsberg's overall revenue edging up only slightly in the second quarter, to $3.4 billion from $3.3 billion in the year-earlier period. Net profit increased to $39.4 million, from $38.9 million kroner.

Carlsberg's full-year net profit was expected "to decline by mid- to high-single-digit percentages."