Carlsberg sees pricing pressure in Singapore

PETALING JAYA: Carlsberg Brewery Malaysia Bhd, which is cautiously optimistic for 2018, is expecting its markets here and in Sri Lanka to perform well while its Singapore operations sees some pressure on pricing.
Its Singapore operations, which contributed about a third of revenue last year,are expected to see pricing come under pressure following a free trade agreement between Singapore and the European Union that will see cheaper imports coming into force in mid-2018.
As for Sri Lanka, its 25% owned associate company in Sri Lanka, Lion Brewery (Ceylon) Plc (LBCP), which is recovering from the adverse impact of severe floods in 2016, is expected to recognise a share of profit this year after minimising its share of loss to RM0.2 million in 2017 from RM5.1 million in 2016.
The brewer, which is looking at continuing its sales growth momentum, displayed a cautious sentiment over potential changes in legislation and macroeconomic conditions.
“There is an election coming up. What is going to happen is that any changes to legislation will impact us. Hopefully not. We are a big taxpayer, we pay a lot of taxes ... a lot of duties ... employ a lot of people ... we are talking about billions so hopefully not, but you never know,” said managing director Lars Lehmann (pix) at a press briefing yesterday.
In addition, the macroeconomic environment and improvement in consumer sentiments in Malaysia and continuous efforts by Malaysian authorities to curb contraband, will benefit the brewer.
Lehmann acknowledged that contraband beers continue to be an issue with 10-15% of consumption in West Malaysia and 80% in East Malaysia.
Carlsberg is aiming for a high single-digit growth in terms of sales during the 2018 FIFA World Cup.
Lehmann added that the late night timing of football matches for the World Cup, which is to commence in June, bodes well for festivities compared with the telecast of Euro 2016 matches, which was aired in the wee hours.
On growth strategy, Carlsberg will also be continuing its SAIL 22 roadmap, which entails three core pillars namely, strengthening the core, positioning for growth and delivering value for shareholders.
Having launched its craft beer variant, namely Brooklyn Lager and Brooklyn East IPA in December, the group is also aiming to become a leading player in the craft beer segment.