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Drop in Russian Beer Sales Hurts Carlsberg

Published: August 21, 2014 (Issue # 1825)



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

COPENHAGEN, Denmark — 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 the government 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 19.2 billion kroner ($3.4 billion) from 19.06 billion kroner in the year-earlier period. Net profit increased to 2.2 billion kroner ($39.4 million), from 2.1 billion kroner.

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

Shares in Carlsberg dropped nearly 4.3 percent to 516 kroner in early morning trading Wednesday in Copenhagen.





 


ALL ABOUT TOWN

Saturday, Oct. 25


AVA Expo, the eighth edition of the event revolving around all things pop, returns to Lenexpo this weekend. Geeks, nerds, dweebs and dorks will have their chance to talk science fiction and explore a variety of international pop culture. Tickets for the event can be purchased on their website at avaexpo.ru.



Sunday, Oct. 26


Zenit St. Petersburg returns home for the first time in nearly a month as they host Mordovia Saransk in a Russian Premier League game. Currently at the top of the league thanks to their undefeated start to the season, the northern club hopes to extend the gap between them and second-place CSKA Moscow and win the title for the first time in three years. Tickets are available at the stadium box office or on the club’s website.



Monday, Oct. 27


Today marks the end of the art exhibit “Neophobia” at the Erarta Museum. Artists Alexey Semichov and Andrei Kuzmin took a neo-modernist approach to represent the array of fears that are ever-present throughout our lives. Tickets are 200 rubles ($4.90).



Tuesday, Oct. 28


The Domina Prestige St. Petersburg hotel plays host to SPIBA’s Marketing and Communications Committee’s round table discussion on “Government Relations Practices in Russia” this morning. The discussion starts at 9:30 a.m. and participation must be confirmed by Oct. 24.



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