Malaysia: Carlsberg Brewery Malaysia keeping close watch on upcoming general election

Carlsberg Brewery Malaysia Bhd is keeping a close watch on the upcoming general election in case there are legislative changes post-polls that could impinge on its bottomline, The Edge Markets reported on April 12.

The country’s 14th general election on May 9 is expected to be fiercely contested between the incumbent coalition Barisan Nasional and its rival coalition Pakatan Harapan.

Ahead of GE14, companies are watchful of potential changes that could result from “the mother of all elections.”

Speaking to the media after the company’s annual general meeting on April 12, Carlsberg managing director Lars Lehmann indicated the brewer did not want to see legislative changes that could hurt its earnings.

“There’s an election coming up, so we don’t know if there is going to be any change in legislation that will impact us. Hopefully there will not be any changes because we are a big tax payer. I’m talking about billions of taxes paid to the government.

“But you never know,” he said.

Referring to the change in law that has been effective since Dec 1, 2017, Lehmann clarified that the law now prohibits the sale of alcoholic beverages to those under 21 years of age. It did not raise the legal drinking age.

“The change in law was actually on the legal purchasing age, not drinking age, which has been increased from 18 to 21 years old. So strictly speaking, the new law only says that you cannot purchase alcohol if you are below 21 years old, but it doesn’t say that you cannot drink it,” he said.

“We don’t know exactly how much of the consumption of our products come from the age bracket between 18 to 21. But we have yet to see any major impact from that [change in legislation].”

The other “big” event this year on its calendar is the FIFA World Cup in mid-June.

Carlsberg believes the timing of matches is ideal and with the right marketing strategies, the event can stir drinkers to consume more beer, boosting volume sales.

“If your execution is right, then you do see a change in consumption. People do drink more beer when they go out to watch the football matches with their friends. It’s nothing more complicated than that,” he said when asked to comment on an analyst report stating the event may not drive a meaningful growth in beer consumption.

He also pointed to the more favourable airtime of the live matches this year as they will be held around 6pm to midnight local time.

“Previous World Cups and Euro match timings may not be favourable, whereby you have to wake up at 3 in the morning to watch the match — it’s not really quite a drinking occasion.

“But this time around the timing is perfect. The matches will be around 6pm, 9pm, and midnight so you can actually catch a game before dinner and then another one after dinner, so that’s really good for consumption.”

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