Bad weather and waning consumer confidence are weighing down Carlsberg volumes, but sales are still rising thanks to higher selling prices. The brewer refused a deal with Russia, which seized the brewery group’s operations in the country.
Volume drop in Europe
Just like its Belgian competitor AB InBev, Carlsberg sold less beer at higher prices in the last (third) quarter. Despite a 2.1 % drop in volume, the brewer was still able to increase sales by 0.27 % to 20.3 billion Danish kroner (2.7 billion euros), thanks to price increases and a focus on premium beer brands.
In Western Europe, volumes fell as much as 5.1 %: the result of disappointing summer weather and weak consumer demand, the Danish beer giant says. Expectations for the fourth quarter are not very bright either: beer demand risks suffering from low consumer confidence in Europe and a weak economy in Southeast Asia. The company nevertheless remains confident that its operating profit could grow 4 to 7 % for the full financial year.
No deal with Russia
Meanwhile, the brewer cut all ties with its operations in Russia. Although Carlsberg said it had found a buyer for its Russian subsidiary Baltika, which has eight breweries and 8,400 employees, Vladimir Putin nationalised that company last summer in retaliation for Western sanctions.
“There is no way around the fact that they have stolen our business in Russia, and we are not going to help them make that look legitimate”, CEO Jacob Aarup-Andersen sounded unusually sharp in a statement that Reuters quoted. Refusing to strike a deal with the Russian government, he ended licensing agreements for its brands in Russia earlier this month. After a notice period, the nationalised company will thus no longer be allowed to produce or sell Carlsberg products.