“Russian ax hung up above Carlberg” – it is a word-for-word translation of Jesper Kongskov’s report published in the newspaper Berlingske in August 20, 2014.
“Carleberg fell into a Russian hole”, “Billions of Carlsberg debts are increasing as if a huge snowball”, “Carlberg will leave Russia”, “Carlberg’s shares crashed after tapping new sources of information about a real operation of the company in Russia” – Denmark business press peppered with quotations.
What has happened? Has a giant transnational brewing group of companies swayed, so it is compared with “clay feet ear”?
Evidently, not in a day. Even from 2008 we predicted this turn of events, in particular, dropping of investment prospects of transnational brewing business in the territory of the RF but during a series of years top-management of CARLSBERG, ABINBEV, HEINEKEN, EFES_SABMILLER managed to cover up problems from their shareholders.
But constant dropping wears away a stone and a dialogue of the President of our Union A. Mordovin with representatives of foreign business community, for example Investment Fund UBS, Goldmann Sachs, Investment Corporation GIC etc. investing in the global brewing industry including Carlsebrg shares are removing the scales from eyes of the world investment community step by step. And it becomes difficult to hide a real situation.
If ABINBEV, HEINEKEN, EFES-SABMILLER had to shut down some their plants, then Carlsberg tried “to make the best of a bad bargain” till the last breath.
Closed ABINBEV plants:
Closed HEINEKEN plants:
Closed EFES_SABMILLER plants:
What CARLSBERG plant will be the first?
Problems were hushed up and catastrophic situation of “Baltika” plants in Russia was unknown abroad. Additionally, for the purpose of minimizing financial losses they switched on the economy regime for Russian companies – it touched on raw materials procurement for beer production as well as equipment. (let’s remember year-by-year increasing payment periods, exceeding 180 days for supplied materials and rendered services and 90 days is considered to be the normal state of things.
Some former employees of the company tell that depreciation of Carlsberg plants “goes through the roof”, production and filling lines are breaking up, there is no money for repair parts, defects are increasing and economics is creaking at the seams.
The pitcher goes often to the well, but is broken at last.
So, as a result of a crisis, Carlsberg is preparing to switch on the tough economy regime that is rather inconvenient for Danish brewing business.
“We are planning to settle a matter”. And it can lead to closing of some plants in Russia . Now I am withholding comments,” said Buhl Rasmussen.
But, dear Buhl, how are you going to explain this situation?
“It is connected with economic sanctions as a result of Ukraine crisis and it had a negative impact on the market,” he stated.
It’s very interesting when it will be enough to try the patience of Carlsberg shareholders, and how much will the top-management spin them a line before they decide to dismiss the staff.
And after that Buhl Rasmussen, Isaak Sheps, Alexey Kedrin etc. will “end up in smoke”.
Debt load is increasing and according to analytical data it exceeded 30 billion krone.
In the first half of 2014 the debt was 36,1 billion as compared with 33,4 billion for the same period last year. It means that the debt increased to 2,7 billion krone.
Besides, Carlsberg issued 10-year bonds amounting to 1 billion Euro (near 7,5 billion krone) in May.
Additionally, Carlsberg has bought major minority shareholding of brewing plants where the company has already been a co-owner before.
Even in 2008 Carlsberg debts were the key point after they took up the majority of shares of Scottish & Newcastle, amounting to 57 billion krone.
“I am satisfied with financial results for the first six months of the current year. Well-target policy influenced positively on commercial activity of the company and resulted in increasing of the company profit and money flow,” Buhl Rasmussen said.
So, we are waiting with bated breath the information about the first closed Carlsberg plant and will lift a glass of champagne, for example, tasty rose Abrau-Durco Brut, a present of the Viticulturists and Winemakers Union, for the victory of the Russian independent brewing business.
By the way, we announce a competition: Those visitors of our website who will correctly guess the place and time of closing of Carlsberg plant in Russia (within the accuracy of a month)( the map of plants location is above) will get a chance to take part in the Beauty contest “Beer Beauty of Russia 2014” as a VIP-participant with a voting right.
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