Carlsberg Reports Drop in Volumes as US Tariffs and Uncertainty Weigh on Performancef

Carlsberg, the Danish brewer founded in 1847, has reported a 2.3 per cent decline in organic volumes for the first quarter of the year. The drop, which is deeper than the 1.7 per cent expected by analysts, has been attributed to subdued consumer spending, the impact of US tariffs, and heightened macroeconomic volatility.

Jacob Aarup-Andersen, the Chief Executive of Carlsberg, noted that global uncertainty has begun to influence purchasing behaviour. He remarked that “prolonged uncertainty will feed into consumers’ decisions,” reinforcing the notion that economic instability remains a critical factor dampening consumer confidence. The company has also pointed to increased costs for raw materials such as aluminium, barley, and sugar, exacerbated by the tariffs imposed by the United States.

In Denmark, a consumer boycott of US brands appears to have added to the brewer’s challenges. Carlsberg, which bottles Coca-Cola in Denmark, saw volumes decline slightly for the brand, although local competitors have continued to grow market share during this period. Aarup-Andersen acknowledged the issue, stating that political events, including controversial remarks by former US President Donald Trump regarding Greenland, had fuelled this boycott.

Despite a gloomy performance in some markets, driven by weakened demand and shifting consumer sentiment, Carlsberg experienced stronger results in China. The company’s premium portfolio performed well in major Chinese cities, delivering a 2 per cent growth in volumes within the market. However, its mainstream brands in the western regions of China were affected by ongoing concerns about consumer sentiment, though the group remains cautiously optimistic about eventual recovery.

Within the UK, the brewer was further hit by the end of a key agreement with Mahou San Miguel, which moved its production and distribution arrangement to Budweiser Brewing Group. This caused significant disruptions to Carlsberg’s UK operations, further weighing on its overall performance in the European market.

Carlsberg’s revenues for the quarter fell by 1.5 per cent on an organic basis, totalling DKr20.1 billion (£2.3 billion). However, factoring in its acquisition of Britvic, the former FTSE 250 soft drinks firm purchased for £3.3 billion last year, reported revenues actually increased by 17.4 per cent. Britvic is expected to contribute £250 million in operating profit for the year.

While navigating the challenges of an unsettled global economy and shifts in consumer preferences, Carlsberg has chosen to maintain its full-year guidance, predicting between 1 per cent and 5 per cent organic operating profit growth. Industry experts, however, remain cautious, as volatility across markets continues. James Edwardes Jones, an analyst at RBC, referred to the results as a reminder of the unpredictability facing global businesses today.