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Thursday 30 Apr 2020 , 11:47 am

Carlsberg Sees Worse to Come as Lockdown Hits Beer Sales

The company has over the past year shifted its focus from cost-cutting to revenue growth, especially by selling more of its pricier brands.
By SIN Bureau
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Carlsberg said on Thursday worse is still to come after a 7% decline in first quarter sales, as increased beer sales in supermarkets failed to balance the closure of bars and restaurants during the coronavirus lockdown.

The world’s third biggest brewer after Anheuser Busch InBev and Heineken said it saw signs of recovery in its biggest market China, where smaller outlets had reopened, after volumes fell by a fifth in the first three months.

“We see some pockets of demand in bars and restaurants, but in general it’s a relatively slow recovery in China,” Chief Executive Cees t’Hart told Reuters.

Carlsberg suspended guidance earlier this month, after sales at bars and restaurants especially in Western Europe were severely impacted as many countries were in lockdown.

Higher sales in supermarkets could not compensate for loss of revenue in bars in western Europe, where volumes fell 6% in the quarter, Carlsberg said.

“Social-distancing requirements will continue and will impact consumer behaviour. Consequently, volumes will decline further in the second quarter,” t’Hart said.

Carlsberg said sales between January and March came in at 12.9 billion Danish crowns ($1.88 billion), compared with 12.8 billion expected by analysts in a poll compiled by Carlsberg.

The company has over the past year shifted its focus from cost-cutting to revenue growth, especially by selling more of its pricier brands.

But the closure of bars and restaurants has hurt that strategy, as consumers under lockdown tend to take no chances with speciality beer in the supermarket and instead stick to multipacks of less expensive mainstream brands, t’Hart said.

Carlsberg’s price/mix, which indicates whether the company sold more or less of its expensive beer, was unchanged in the three months.

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Neha Mule

Neha writes articles on sectors including medicine, food, materials, and science & technology. A qualified statistician, she has the ability to observe and analyze the trends in global markets and write compelling articles that help CXOs in decision making. She is a bookworm and loves to read fiction, lifestyle, science and technology. Neha comes with 6 years of experience in content writing and editing that involves blog writing, preparation of study materials and OERs.

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