India: Carlsberg posts 30% drop in volume in India

Carlsberg has posted a 30 per cent drop in volume in India and described the market as highly uncertain and volatile due to high COVID-19 infections. Cees’t Hart, Carlsberg’s Global Chief Executive, also said the Indian market was struggling socially and economically, the Plunge Daily reported on October 28.

The beer company’s Indian business at off-trade or retail channel fell 40 per cent in the quarter ended September. Carlsberg, which is the world’s third biggest brewer, is India’s third largest brewer after United Breweries and AB InBev. It is also one of the fastest growing beer companies in the segment since it stepped into the market 12 years ago. In the first quarter revenue for the company’s Asia business, which was responsible for Carlsberg’s strong performance, declined by 12 per cent driven by an organic volume decline of 15.5 per cent. Reports highlighted that the Chinese market, the brewer’s biggest market, was impacted the most with an organic volume decline by about 20 per cent, as lockdown started early January. As for the rest of Asia and in Western Europe, the beer company had an impact in some markets in late February, but at the end of the quarter, all markets were entering into some level of lockdown.

Hart said the infections are high in India, and as such the number of customers remain subdued as they fear contracting the virus as crowds are gathering. Heine Dalsgaard, the chief financial officer, noted that while recovery from COVID-19 is high due to a large young population, life and businesses are only very slowly, trying to return to normal, and the impact on the Indian economy is severe. Dalsgaard also pointed out that Carlsberg’s growth numbers were higher than the over market expansion.

The Budweiser Brewing Company also witnessed a similar decline due to the prevailing pandemic. In an official statement, it said consumer demand was also impacted by the temporary COVID-19 cess imposed by some states, which further exacerbated the price differential between beer, an alcoholic beverage of moderation, and hard liquor. It added that though temporary, the change may lead to unintended consequences such as increased consumption of low-quality or even illicit liquor that has last impact on public health adversely.

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