Carlsberg is “considering” closing some of its breweries in Russia as the country’s beer market continues to falter, the group’s CEO has revealed.
In an analysts’ conference call today, following the Danish brewer’s half-year results, Jørgen Buhl Rasmussen said the company has already taken “tough decisions” at its Baltic Beverages Holdings division in Russia, including structural changes in logisitics, sales and production. The company has seen a “significant” reduction in headcount at BBH in the last few years, CFO Jorn Jensen later admitted.
Rasmussen added: “We are considering brewery closures as well. We will not comment further on such closures, but will come back to you when final decisions are made.”
Carlsberg currently operates ten breweries in the country. Its rivals, Anheuser-Busch InBev and Anadolu Efes, part owned SABMiller, have both been forced to close breweries in Russia.
Brewers have struggled in Russia as a clampdown on beer sales last year has hampered the market. Carlsberg’s first-half sales in Eastern Europe, including Ukraine, fell by 18%. The performance was also blamed on the “uncertain macroenvironment, weak economic development and bad weather”.
Later, Jensen added: “There comes a point in time when we have more capacity in the market than what we need. That, of course, leads to the consideration around how the brewery landscape should be.”
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By GlobalDataSeparately today, Isaac Sheps, the president of BBH, said there had been “major changes” in the unit’s top management team, without offering further detail.
Looking ahead, Rasmussen warned: “With the current political tension (in Russia) we do not expect market conditions to ease in the remainder of the year.”
The company did not rule out further job losses if volumes continue to fall in Russia.
