Russian tax hike hits Carlsberg profits

Carlsberg - Fourth Quarter Profit Down

Carlsberg – Fourth Quarter Profit Down

A higher excise duty imposed by Russian authorities supposedly to combat alcoholism has hit the fourth quarter profits of Danish brewer Carlsberg, the company said in a statement.

Carlsberg enjoys a 40% market share in Russia. Profit after tax was recorded at 301 million Danish Kroner ($55 million, £34 million) in the last three months of 2010, compared to 383 million Danish Kroner recorded over the same period a year earlier.

However, profit for the full year jumped by 50% to 5.4 billion Kroner in 2010 from 3.6 billion Kroner reported a year earlier.

Sales of beer in Eastern Europe fell by 9% in 2010, the company said in a statement. A 200% hike in excise duty in Russia that caused a significant price rise and destocking since 1 January, 2010 – when the hike took place, caused fall in sales in the first quarter.

“For 2011 we believe market dynamics will improve slightly, not least in Eastern Europe where we anticipate the Russian market to return to growth”, said Jorgen Buhl Rasmussen, chief executive of Carlsberg.

Apart from its flagship brand Carlsberg, the company manufactures other brands such as Tuborg, Kronenbourg and San Miguel beers.

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