just On Call - Carlsberg CEO eyes China consolidation
Carlsberg announced its FY results today
The CEO of Carlsberg has said that the brewer could start consolidating its expanded interests in China in the next few years.
In a call with analysts after full-year results today (19 February), Jorgen Buhl Rasmussen said that the company is currently integrating its China assets, which last year increased with a bigger stake in Chongqing Brewery. Although he warned that combining the businesses is “not yet on the agenda”, he said: “In a few years out, then there could be consolidation.”
Carlsberg upped its stake in Chongqing Brewery to 60% at the end of 2013. It has also increased shareholdings in its Qinghai and Lanzhou joint ventures to 50%, and in Tibet Lhasa Brewery to 50%.
The brewer has increased focus on China as its core Russian market struggles with regulatory pressures. Last year, Carlsberg announced it will build a new brewery in southern China, which is expected to be the company's second biggest globally.
Meanwhile, Rasmussen said the Russian economy suffered its weakest year since 2009, contributing to Carlsberg's operating profits and sales declines in the country. However, he added that he expects no new regulations to be added to existing rules that have closed off a number of the beer industry's routes to market.
“The dialogue the beer industry has with the (Russian) Government has improved and there are no new ideas coming up in the beer category,” he said. “All the regulation that has come through recently was stuff that was discussed two years ago.”
Russia's beer market shrunk by high single-digits last year as disruption from the enforced closure of beer kiosks hampered performance. Regulations on alcohol advertising have also hurt brewers in the country.
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