June 17 (Bloomberg) -- Carlsberg A/S’s chief executive officer forecast Russian beer consumption will recover within two years after a tax rise hurt revenue, and said sales have climbed in the U.K. and Denmark because of the soccer World Cup.
Carlsberg, which owns Russia’s largest brewer, expects Russian consumption to fall to 63 to 64 liters per capita this year, before rebounding to 80 liters “in a couple of years,” Jorgen Buhl Rasmussen said today in an interview with Bloomberg TV in St. Petersburg. The eastern European unit generated 44 percent of Carlsberg’s operating profit in the first quarter.
“Russia for us is a big opportunity,” Rasmussen said. “This market is challenging, there are still some uncertainties but the overall Russian economy is getting better, consumer confidence is going up and it’s positive for consumption.”
The company has also seen a “significant uplift” in sales in the U.K. and Denmark during the World Cup, Rasmussen said. “England or Denmark making the championship would be very good.” he said. “If they play each other, even better.”
Russian beer production fell 3.7 percent in April from a year earlier after the country raised tax on the beverage by 200 percent as of Jan. 1. Carlsberg’s eastern European unit, which includes Ukraine, Kazakhstan and Uzbekistan, saw its first-quarter volume sales slump 27 percent, it said May 11.
“Because of the crisis the volumes have come down and we expect a lot of growth still to come out of Russia,” Rasmussen said at the St. Petersburg International Economic Forum. The Copenhagen-based company aims to increase its market share in the country, he said. It slipped to 39.1 percent in the first quarter from 40.9 percent a year earlier even though the brewer didn’t pass on the full tax rise to customers.
Carlsberg, which recently increased its stake in Chongqing Brewery Co., plans to further expand in “strategic growth markets” in Asia such as China, Vietnam and India.
The company boosted its share in Chongqing as “part of that strategy to expand our role in China and move slightly more east and still work with the local government and local partners,” Rasmussen said.
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