Carlsberg Plans U.K. Market-Share Growth as Bottling Line Opens
Carlsberg AS (CARLB) said today it intends to increase U.K. market share as the world’s fourth-biggest brewer opens a new bottling line at its Northampton brewery.
Carlsberg is seeking to increase its hold on the declining U.K. beer market in pubs and bars, as well as through supermarkets and off-licenses, Benet Slay, its U.K. head, said today in a telephone interview. The Copenhagen-based company raised its market share in the country by 0.3 percent to 15.3 percent last year, it said in annual results in February.
U.K. alcohol consumption fell to the lowest since 1998 last year, according to the British Beer & Pub Association. Carlsberg’s results in 2012 were hurt by bad weather, Slay said, and the effect of longer-term government tax increases on beer. Even so, the brewer’s volumes fell less than the market.
The company’s U.K. volumes declined 3 percent as Carlsberg won share in pubs and bars while suffering a slight decline in drinks to take home. The overall U.K. beer and cider market fell 5 percent last year, Carlsberg said. Steady volumes of the Carlsberg brand and a 20 percent to 30 percent increase in San Miguel sales aided the company.
Carlsberg has spent 20 million pounds ($29.8 million) adding a bottling line in Northampton that can produce 60,000 bottles of beer an hour. The Danish company will start using “quite a reasonable chunk of the capacity,” Slay said. That may aid profitability by reducing outsourcing.
The company is seeking to increase its operating margin, a measure of profitability, by 0.5 percent a year on average for the next five years in western Europe, including the U.K., through measures including more efficient raw-material purchases and production.
Carlsberg has started selling its Somersby cider in the U.K., after demand for cider increased in the last few years, Slay said. The cider market was “flat” last year.
The brewer will also introduce a lower-alcohol citrus variant of its main Carlsberg brand, he said, tapping into a “strong trend in the direction” of drinks containing less alcohol as consumers seek to limit the amount they drink.
Carlsberg expects most of its European markets to “be quite similar to what we saw last year,” said Chief Executive Officer Joergen Buhl Rasmussen, who opened the bottling line today. He declined to give precise guidance on the company’s performance this year.
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