Heineken and Carlsberg express faith in Asian market

Heineken and Carlsberg express faith in Asian market

The world's third and fourth largest brewers in the world, Heineken and Carlsberg, forecast a higher profit in 2016 thanks to increased Vietnamese and Southeast Asian demand. 

Lower oil prices

The regions' increased demand should help offset disappointing Russian and Chinese demand and lower their impact on both beer brewers' profit. Beer sales have dropped in Russia (and other oil manufacturing countries like Nigeria) because of the disappointing oil prices, which have dropped 40 % compared to February 2015. These countries have taken a huge economic hit, which shows in the corresponding beer sales. 

 

The Chinese economic growth has slowed down, which not only affects beer sales, but also has a reverberating effect in other branches. Other Asian markets have made strides in turnover, cancelling the Chinese drop

 

Carlsberg under pressure in Europe

Heineken's 2015 profit grew 16 % to nearly 2 billion euro, while turnover grew more than 6.5 % to 20 billion euro. Asian turnover grew 6 %, while there was a 1 % turnover increase in Europe.

 

Carlsberg's result were slightly less impressive, despite a turnover growth to 65 billion krona (nearly 9 billion euro). Beer sales were 4 % lower than in 2014 and net profit also dropped 17 %, mainly because of weaker West and East European results. On top of that, the Danish brewer is going through a restructuring plan, cutting jobs and closing down breweries. Carlsberg aims to present a new growth strategy in March 2016.

 

Both companies face a huge challenge in the second half of 2016, when AB InBev's merger with SABMiller is finalized and they come up against a huge competitor.