Carlsberg Says Russians Choosing Premium Beer Is Helping Share

Carlsberg A/S said Russians are shifting toward its premium beers with branded goods helping bolster sales amid political turmoil and government regulation to curb drinking.

“Russians still, despite the crisis, like brands,” Chief Executive Officer Joergen Buhl Rasmussen said in a telephone interview after Carlsberg, the biggest brewer in Russia, reported increased share in the market. “They are tempted to buy into brands whether it’s beer, food products or clothing.”

Russian demand for Carlsberg’s premium drinks such as the Baltika 7 and Brewer’s Collection helped offset the impact of a weakening ruble and government regulation on the world’s fourth-biggest brewer. Carlsberg’s share of the Russian market by volume improved to 37.9 percent in the third quarter from 36.5 percent in the preceding period, it said.

“I think we will see positive mix, trading up, in the Russian market also for the years to come,” Buhl Rasmussen said.

Carlsberg stock gained as much as 4.5 percent in Copenhagen, the steepest intraday increase since March 25. At 2:48 p.m. it was up 2.5 percent at 522 kroner. The shares have lost 13 percent of their value this year.

Shrinking Market

The Russian market shrank as much as 7 percent in the first nine months of the year by volume, Carlsberg said. After government measures to reduce drinking weighed on sales for the last five years, brewers are now contending with consumer pessimism brought about by the recent political tensions between Russia and its western trading partners.

Russia “will always be a very important market for Carlsberg,” he said. “It’s not like it’s unattractive to be in, it’s just been extremely challenging the past few years.”

The Copenhagen-based brewer’s improvement was driven by new products as well as continued sponsorship of sports and teams, such as the Continental Hockey League, the CEO said. Carlsberg also this year started filling some bottles with less beer to help limit price increases.