Carlsberg loses market share in the UK

By Michelle Perrett

- Last updated on GMT

Carlsberg will continue to drive value and focus on brand development
Carlsberg will continue to drive value and focus on brand development

Related tags: Market share, Europe, Marketing

Carlsberg, the Danish brewer, has reported that UK sales for the six months to June 30 remained flat. Its UK volumes declined and the company lost market share as it expected, it said.

Carlsberg said it would continue to drive value and would be focusing on brand development and innovation. “We recently launched several new products, including the draught craft beer Shed Head in the on-trade,” ​it said.

The brewer also announced plans to exit porterage distribution services by the end of the current contracts and outsource its secondary logistics operations.

Last month, it was revealed that Carlsberg planned to outsource 1,000 jobs to DHL Tradeteam. The decision was made to create a business that was “agile and responsive​”. Outsourcing the logistics was said to offer “a sustainable long-term solution in terms of service and cost”.

Operating profit for the six-month period fell to 3.45bn Danish kroner (£400M) down 4% from same period last year.

The company said that in most other markets in western Europe there was market share growth, margin improvements and operating profit growth, with particular strong improvements in markets such as Italy, Greece, Bulgaria and Germany.

Total volumes declined

Net revenue in western Europe grew organically by 2%, driven by a 3% price/mix – where Carlsberg’s profit has increased by specifically improving price on either the same products or a better mix of products – as total volumes declined organically by 1%.

Operating profit grew organically by 9%. The western European beer markets grew by an estimated 2%.

Eastern European net revenue grew organically by 8%, driven by a solid price and flat total volumes, the company said.

Reported net revenue overall declined by 15%, it revealed, due to a “significantly negative currency impact”.

The Russian beer market declined by an estimated 2% for the first half year. It said the neighbouring Ukrainian market continued to be difficult, declining by an estimated 6%.

Net revenue in Asia grew organically by 4%, while Chinese volumes declined organically by 8%.

‘Strong improvement’

“The Carlsberg Group delivered a good set of results in line with our expectations. Most notably, we achieved a solid top-line and profit development as well as a strong improvement in cash flow,”​ said Carlsberg chief executive Cees ‘t Hart.

“With the satisfactory execution of our plans so far, we maintain our full-year outlook for organic growth in operating profit.”

Based on the results of the first six months and July, the Group said it expected to deliver single-digit percentage organic operating profit growth and financial leverage reduction.

In November 2015, Carlsberg revealed it was to cut around 2,000 white-collar jobs worldwide and scale back on beer production at its brewery in Northampton.

The results come as the takeover of SABMiller by AB InBev is to take place on October 10, 2016. The deal, revised to £79bn, will create a company responsible for almost one-third of the global beer output.

Related topics: Drinks

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