World: Carlsberg expands cost-cutting programme and suspends outlook
Carlsberg said on April 2 it has expanded its cost-cutting programme and suspended outlook as beer drinkers under lockdown in key European markets opt for cheaper beers, Reuters reported.
The worlds third biggest brewer said that while sales at bars and restaurants in Western Europe were severely impacted as many countries were in lockdown, sales at supermarkets were less affected.
However, as consumers top up their trolleys with daily essentials during less frequent visits to the supermarket, they tend to take no chances with speciality beer and instead stick to the less pricey mainstream brands.
Consumers shift their purchasing towards multipacks and show less demand for craft and speciality products, the Danish brewer said in a statement.
With most bars and restaurants closed across Europe to tackle the coronavirus pandemic, grocery sales have spiked to record highs in some countries as shoppers under lockdown stock up on essentials.
In China, Carlsbergs biggest market in terms of volume, there were signs of recovery in March after volumes were significantly down in February, the brewer said.
Carlsberg added that it had suspended guidance for 2020 and would review the second part of a share buy-back programme that was announced on Feb. 4.
The recent rapid increase in lock-downs of key markets and the uncertainty about the further development of the pandemic make us unable to estimate the full impact of COVID-19 on our business, Chief Executive Cees t Hart said.
To mitigate the earnings impact of the lost volumes, were further emphasising our Funding the Journey (cost-cutting programme) initiatives and have launched several firm cost reduction initiatives, he said.
The brewer has implemented hiring restrictions and is looking to reduce marketing and promotional campaigns.
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