Carlsberg sales fall in the first quarter
Brewer Carlsberg has today said it’s sales fell more than expected in the first quarter due to decline in China’s market and foreign exchange fluctuation.
Sales fell 3% to 13.01 billion Danish crowns ($1.99 billion), missing the 13.18 billion crowns average of 14 analyst estimates compiled by Thomson Reuters.
“Beer market development in Asia was mixed with continued growth in markets such as India and Nepal while the Chinese market declined by 3-4pc,” Carlsberg said in a statement.
The brewer said sales volume grew in India and Nepal, and declined in China as a result of brewery closures.
Carlsberg’s sales in Asia surpassed those in Eastern Europe last year but volume fell in China.
The company decided to close seven breweries mainly in eastern China to focus on strongholds in the western part of the country.
Carlsberg is the smallest of the world’s four biggest brewers – soon to number three with the planned $100 billion takeover of SABMiller by Anheuser Busch Inbev. Heineken is currently ranked third.
China is increasingly important for big international beer brands as growth elsewhere stalls.
The country accounted for half of the industry’s global volume increase last year.
Snow is China’s top-selling beer with a market share of around 30%. AB Inbev said in March it would sell 49% of Snow to China Resources Beer Holdings as part of its planned takeover of SABMiller.
Since assuming his role a year ago, Carlsberg’s Dutch CEO Cees ‘t Hart has launched a cost-cutting programme and a strategy to boost growth, which has been subdued since the takeover of leading Russian beer brand Baltika.
The Danish brewer, which did not disclose first-quarter profit, said it expected low single-digit organic operating profit growth in 2016.
It also said it expected a negative foreign exchange impact of 550 million crowns in 2016, rather than earlier guidance of 600 million.