Danish brewer Carlsberg expects its key Russian beer market to begin recovering in 2012 although the decline in western European markets could intensify over the next three years as the euro zone crisis bites.
The world's fourth-largest brewer said the Russian market, which accounts for a third of group sales, will this year improve after suffering big tax hikes on beer in 2010, high inflation levels and regulatory headwinds, Chief Executive Jorgen Buhl Rasmussen told Reuters in an interview.
"As an underlying trend we will see our Russian market share growing in 2012," Rasmussen said on January 02. "What happened in 2011 and the last two to three years have been very unique," he said referring to the tax rises, falling beer markets and intensifying price competition.
The group's sales of its No 1 Russian brand Baltika weakened after the Russian government cracked down on beer drinking to tackle alcoholism, including a 200 percent increase in excise tax in January 2010. "We are facing different conditions entering 2012," Rasmussen said.
For 2011, Carlsberg expects the Russian beer market will have declined in the low single-digit percentages, but the 2012 turnaround would be aided by a generally healthy Russian economy, he said. In the third quarter of 2011, the Russian beer market - the world's fourth largest after China, the United States and Brazil - declined by about 7 percent, and Carlsberg's market share fell to 37.8 percent from 39.3 percent previously. While Eastern Europe would return to growth this year, the outlook for 2012 was gloomier in mature western and northern European markets.
In November, Rasmussen told Reuters the brewer was preparing for the worst conceivable business conditions in 2012 and looking for ways to control costs as the euro zone crisis threatens to escalate.