Carlsberg halts production at Russian brewery – The Post

Carlsberg halts production at Russian brewery

Declining demand brings brewing to standstill

September 30th, 2014 5:17 pm| by admin

Baltika, Carlsberg Group’s Russian concern, has halted manufacturing at its Chelyabinsk brewery due to dwindling demand on the Russian market, Reuters reports.

The geopolitical situation in Ukraine and the resulting diplomatic tension between Nato member states and Russia has been of concern to the Carlsberg Group for some months.

READ MORE: Carlsberg hanging tight in Russia

However, Mairbek Sageev, the head of the Chelyabinsk brewery, told Reuters that the decision to suspend operations was the result of local conditions. "This is connected with the end of the high summer season and the onset of autumn, when demand for the products is on the decline," he said.

"In addition, this factor was bolstered by a significant drop in the total beer market."

The drop in beer sales can be attributed both to increased regulatory controls on the sale of alcohol, an initiative championed by President Putin, and an economic slowdown in Russia.

Reuters reports that, according to Baltika, beer sales have dropped by 24 percent in the period from 2008 to 2013 and a further seven percent in the first six months of 2014.