Carlberg have reported falling operating profit in the third quarter, with eastern European sales decling in Russia. Also much-needed Asian revenue stalled due to currency movements.
The brewing giants have expanded into emerging markets to counteract slow growth in western Europe. However, due to anti alcohol campaigns, the Russian market has been curtailed.
Sales in while Asia sales were flat while Eastern Europe revenue dropped by 21%. The Russian beer market was curbed by the ban on alcohol sales after 11pm and with restrictions on the amount of beer stalls and kiosks can sell.
Competitors such as SABMiller an Heineken are dependent on the Asian market to supply growth while the Russian market declines.
Jorgen Buhl Rasmussen, Carlsberg chief executive, predicts that there will be some slow down in growth rates in Asia. However, Carlsberg had been successful persuading Asian consumers to switch to more expensive premium brands as opposed to their cheaper brands. "But there is no way out if the markets slow down," he added.Carlsberg said organic net revenue grew by 8% in Asia in the first quarter, but it was hit by negative currency impacts.
Last month, the Carlsberg Foundation said it wanted to drop a rule in its charter that it must own at least 25%. This venture could give more scope for for further acquisitions in Asia. However, recent high deal multiples would most likely make acquisitions expensive. Last year, Heineken paid 35 times trailing earnings for control of Asia Pacific Breweries.
