Carlsberg sales dip amid cost cutting measures

Danish brewer Carlsberg on Wednesday posted a rise in first half profit but sales dropped as the company began to implement a new strategy to offset falling sales in Russia.

Carlsberg sales dip amid cost cutting measures
Cost-cutting measures are casting a long shadow over Carlsberg's operations. Photo: INTS KALNINS/Scanpix
Net profit jumped 25 percent to 1.9 billion kroner ($288 million, €255 million) compared to 2015 despite a four percent slip in revenues to 31.24 billion kroner over the same period.
Stripping out interest, taxes and one-off items, earnings fell 3.6 percent to 3.45 billion kroner, which was below a Bloomberg analyst consensus of 3.58 billion kroner.
Carlsberg has been struggling with falling sales in Russia, where it is the biggest brewer, as well as with sluggish growth in Asia.
In March it launched a new plan to offset the decline by raising profit margins through an increased focus on premium brands and by closing operations in some markets.
“With the satisfactory execution of our plans so far, we maintain our full-year outlook for organic growth in operating profit,” chief executive Cees 't Hart said in a statement.
The group, which did not disclose a quarterly profit or loss, maintained its annual forecast of “low single-digit percentages organic operating profit growth.”
Shares in Carlsberg were 4.3 percent lower in late morning trading on the Copenhagen bourse, where the main index was down by 0.7 percent.

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Is Carlsberg about to release a paper beer bottle?

Two prototypes and new partnerships have brought Danish brewing giant Carlsberg a step closer to releasing a paper beer bottle.

Is Carlsberg about to release a paper beer bottle?
Is the glass Carlsberg bottle living on borrowed time? Photo: Kristian Juul Pedersen/Ritzau Scanpix

Carlsberg said in a press release that it was close to selling beer in paper bottles, in part to the partnership.

Having worked on development of sustainable packaging since 2015, the company is scheduled to present two prototype paper bottles in Copenhagen on Friday.

“Although we’ve not yet reached our goal, the two prototypes are a significant step on the way to achieving our ultimate ambition, which is to bring this groundbreaking technology onto the market,” deputy director of Group Development at Carlsberg, Myriam Shingleton, said via the press statement.

A ‘paper bottle union’ between Carlsberg, The Paper Bottle Company (Paboco) and three other global companies – Coca-Cola, L'Oréal and The Absolut Company – is driving the development, according to the Danish brewery.

Paboco said that the partnership with the high-profile brands would strengthen work to create sustainable packaging.

“We are working across different retail sectors, sharing risk and are together in our vision to make the paper bottle reality which would fundamentally change the sector forever,” Paboco CEO Gittan Schiöld said.

Both prototypes are constructed primarily of sustainably grown wooden fibres and have internal coatings which enable them to contain beer.

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