Carlsberg has said it is scrapping its profit margin target for eastern Europe as sales growth stalls in its key Russian market .
The Danish brewer – which is the world’s fourth-biggest – is also blaming rising costs for energy and ingredients like barley.
Carlsberg, like its bigger rivals AB Inbev, SABMiller and Heineken, has been relying on emerging markets to offset weak beer sales in recession-hit western European.
Its profits are also under pressure from the cost of an efficiency drive in western Europe.
The group, which makes just over 60 percent of its sales in western Europe, has built up a market leading position in Russia.
But its business there has been has been hampered by a government drive aimed at curbing alcohol abuse, with measures taken including excise tax increases and a ban on advertising in all media, including the internet.
Carlsberg, whose brands include Baltika and Tuborg, said its sales growth in Russia stalled in the fourth quarter. That was better than a broader market decline of two to three percent, it said, but down from growth of about two percent in the third quarter.
The company’s share fell and analysts were downbeat. “The change in long-term financial targets is probably the most disappointing element in the report,” said Sydbank analyst Morten Imsgaard.
“It helps paint a picture of a brewery which is not entirely in control of factors which are decisive for earnings,” he said.