The Russian government implemented a 200 per cent increase in excise duty at the beginning of the year, prompting fears of a double digit sales decline in what is an important market for Carlsberg.
However, in an earnings update on the first six months of 2010, Carlsberg said the Russian decline has so far been less pronounced than previously feared. The brewer reported a 9 per cent fall in Russian sales in H1.
It now anticipates a high single digit percentage sales drop for the full year as opposed to a low double digit decline as previously predicted.
Commenting last week on the Russian beer market, Canadean analyst Kevin Baker told BeverageDaily.com that Carlsberg had weathered the tax storm in Russian better than many people thought thanks to careful brand management. Its strategy has been to focus on developing its premium brands which can absorb cost increases more easily and are less sensitive price changes.
In its trading update, Carlsberg added that the better than expected Russian figures were also down to the improving macro economics and slightly better consumer sentiment in the country.
New full year forecast
The improved market outlook in Russia and favourable currency fluctuations, including the continued recovery of the Russian Rouble, has led the company to reconsider its full year outlook for the group.
Operating profit is now expected to be about DKK 10bn compared to previous expectations that it would be in line with that reported for 2009 (DKK 9.39bn). Net profit growth is also expected to be higher than previously anticipated - around 40 per cent compared to previous expectations of more than 20 per cent.
For the first six months of the year overall beer volumes at Carlsberg were down by 2 per cent while operating profit grew 12 per cent.