Carlsberg facing higher costs and weaker demand in Europe

Carlsberg facing higher costs and weaker demand in Europe

Carlsberg has announced plans to cut up to 150 jobs in Europe in reaction to the region's weak economic outlook and sluggish demand for beer.

Carlsberg said yesterday (30 November) that it would cut between 130 and 150 headquarter positions across its operations in its European beer business. It said that 95 workers have been made redundant with immediate effect across Denmark, Switzerland and Poland.

Earlier in the week, Carlsberg said that job cuts were likely at its Copenhagen headquarters. The brewer faces weak demand for beer within Europe's fragile economy, higher barley costs and needs to restore investor confidence after a worse-than-expected performance so far in 2011.

"We are preparing for challenging market conditions in the coming years in Europe," said Carlsberg's CEO, Jørgen Buhl Rasmussen. "Our response is to focus on fewer, but more important activities and execute them with greater impact. This also means that there will be activities which we choose not to do or become a lesser priority."

In order to better insulate itself from rising energy and barley costs, Carlsberg said that it is developing a central supply organisation for Europe. This will be based in Switzerland and will incorporate the group procurement, supply chain and logistics functions.

Peter Ernsting will join the brewer to become SVP of the new supply organisation, after performing a similar role at Unilever, Carlsberg said. Bengt Erlandsson, Carlsberg's current head of procurement, will work alongside Ernsting in the new supply unit, which is to be operational by the end of 2012. As a result, Erlandsson has been promoted to SVP level and will sit on Carlsberg's executive committee.

Carlsberg employs around 43,000 people worldwide.