Danish brewery giant Carlsberg could face severe financial ramifications in Russia because of the crisis in Ukraine and is closely monitoring the situation.
While the Danish brewer has been unaffected until now, the crisis could lead to a weakened Russian currency and a financial crisis that could cripple one of Carlsberg’s largest markets.
“Our business is unchanged at the moment, but we are very aware of the situation and are following it closely,” Jens Bakke, the head of communications at Carlsberg, told Berlingske newspaper. “We are naturally concerned about the developments.”
Beer sales falling
In particular, western sanctions against Russia could become a problem for Carlsberg because it would make it difficult for the brewery to do business there, according to Tobias Björklund, an analyst from Danske Bank.
”As always, there are many possible scenarios. If Russia enters into a larger recession and private consumption falls, it would hurt Carlsberg,” Björklund told Berlingske.
“And if the Russian currency continues to lose strength against the euro, it would also be damaging for Carlsberg.”
Carlsberg became an important player in the Russian market in 2008 when it assumed control of Russia’s biggest brewery, Baltika.
But since then Carlsberg has encountered a number of difficulties while navigating the Russian market – including a 200 percent tax rise since 2009 – and last year beer sales in the country fell by eight percent.