sip on this
Posted by Mark J. Miller on May 10, 2012 03:01 PM
For some, soccer makes the world go round. For Danish brewer Carlsberg, soccer makes their accountants go around the bend.
The 165-year-old brewer, the world’s fourth biggest, is making a major investment by sponsoring football’s UEFA Euro 2012 European Championships this summer and that financial commitment to woo sports fans has hurt Carlsberg’s first-quarter numbers. Also hurting its numbers in the quarter: a sales slump in Russia, where Carlsberg owns 40% of the beer market.
"Our bottom line fell as a result of two factors: one being stock building in Russia in the fourth quarter, which led to significant destocking in the first quarter; the other was an increase in marketing efforts in Russia and connected to the European Championship," said CEO Joergen Buhl Rasmussen, according to the Wall Street Journal.
The stock buildup of beer in Russia occurred before Jan. 1 when a duty increase went into effect there. The company still expects to hit all of its targets this year, the Journal notes, but now will have to make up for the first quarter, which found the company having a net loss of 76 million Danish kroner ($13.3 million). Sales and distribution expenses went up 347 million kroner as well to 4.35 billion kroner on the quarter.