Just On Call - Carlsberg plays down impact of French duty hike
Carlsberg's top execs were speaking to analysts following the group's FY results
Carlsberg's boss has predicted that a 160% tax increase in France will only cause mid-single volume declines due to the premium nature of the country's market.
Speaking during an analysts' conference call today (18 February), following the group's full-year results, Jørgen Buhl Rasmussen said France's beer market has “premiumised”. Beer tax in France increased by 160% last month after the measure was approved by French Parliament in December.
But, Rasmussen said: “The price sensitivity in France is less than you would find in some other markets and that's why we assume this 10% to 15% consumer price increase will only cause mid-single digit market decline.”
Meanwhile, the CEO also indicated that the latest hike in Russian beer duty has yet to be fully offset and will be reflected in the group's next wholesale price increase. Last year, the Russian Government introduced an alcohol duty escalator on all categories, which runs until 2014.
“The increase we took in October 2012 is only part of the increase we will take to cover the excise duty,” he told analysts. But, he said the brewer's competiton had followed suit last year. “In general, I would say, in 2012, we have seen competition not being very different to our pricing,” he added.
In Uzbekistan, production was suspended last year by Carlsberg. Asked about the future prospects for the country, deputy CEO & CFO Jorn P Jensen said: “The challenge we have is mainly linked to conversion of currency and therefore getting raw materials. We are still working on that solution. We are still hopeful, but it is not straightforward.”
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