Comment - Brewers Send the Brits to Russia
It's tempting to say yes. For different degrees of urgency, both brewers need a firm hand on the tiller in a region that is proving volatile and unpredictable.
Carlsberg's Isaac Sheps will move to Russia from the UK on 1 December. Given the sullen state of the UK beer market and the deflated state of Russian beer sales, one could argue that a switch between either conjures that old saying about escaping from the chip pan into the fire.
A firefighter, though, is exactly what Carlsberg needs in Russia right now. It is not an exaggeration to say that the entire group management looked weaker following the disappointment of the group's half-year results, in which it reported that net profits unexpectedly slid by 26%. In the end, Sheps' predecessor, Anton Artemiev, has been unable to continue as CEO of Baltika Breweries and SVP of Carlsberg in Eastern Europe.
In addition, Russia's beer market continues to face myriad regulatory and economic challenges. Sales have not rebounded as strongly as was hoped in 2011 and, in 2012, all brewers face tighter restrictions on sales.
What is probably also bugging Carlsberg is the announcement last week that SABMiller and Anadolu Efes will join forces in Russia. Subsequently, while Carlsberg's Baltika Breweries is way ahead of the pack in Russia, with a 40% volume share of total beer sales, it will face stronger competition next year.
Sheps comes into the fray after three years at the helm of Carlsberg UK. During that time, he has tripled the UK unit's profits and increased its volume market share from 13% to 15%, despite fierce competition, duty tax rises and consistent quarterly declines in the overall beer market. Who better, then, to lead Carlsberg through a turbulent period in its key Russian operations, where similar challenges lie in wait?
To a lesser extent, perhaps, Anheuser-Busch InBev may be using a similar formula. MacFarlane has been with the InBev business for almost 20 years and was installed as its president of UK and Ireland in the same year as Sheps arrived in the UK for Carlsberg. Earlier this year, A-B InBev announced that MacFarlane would be packing his bags for Russia.
Most recently, MacFarlane has overseen strong growth for Budweiser in the UK; a brand that A-B InBev also has high hopes for in Russia. In 2010, A-B InBev's beer sales rose by 3.4% in the UK, helping it to gain market share in both the on- and off-trades. That said, a tough comparative against the FIFA World Cup saw the group's UK arm drop volumes and lose market share in the second quarter of this year.
It is true that multinational corporations like their executives to sample a bit of everything. Reshuffles are commonplace and there is probably some of that at play here, particularly in A-B InBev's case. Both men, however, have proved themselves to be level-headed captains in stormy waters.
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