Carlsberg upbeat after beer sales rise

Carlsberg raised its profit prediction for the year after beer sales rose eight per cent in the first half of 2006, thanks to a limited recovery in Western Europe and more gains in the East.

Carlsberg said it expected operating profits to be around €26.8m higher than expected this year, taking them over the €500m barrier.

The brewer's upbeat mood surfaced as it announced a continued recovery on the rather stagnant Western European beer market.

Lady luck has come up with the goods for European beer markets this year, with the football World Cup in Germany in June and a spate of unusually hot weather sweeping much of the continent.

Carlsberg said it had also been helped in the first half by a two per cent rise in average selling prices for beer across Western Europe.

The recovery in this region helped to push the group's total sales to €2.5bn and operating profits up 30 per cent to almost €228m.

Still, growth in Western Europe remains limited compared to the continued dynamism of beer markets in Eastern Europe and Asia.

Carlsberg again benefited strongly from the Russian beer market, which it said grew around six per cent in volume over the six months. The brewer's joint-venture in with Scottish & Newcastle, BBH, also continued to march into other Eastern European markets.

Asia produced the strongest growth for Carlsberg, with beer volumes up 36 per cent in the first half, although 27 per cent of this was down to acquisitions in Cambodia and Western China.

The figures for China and Russia in particular reinforce Carlsberg's plan to have a bigger involvement in these countries at the expense of operations in Western Europe.

The group plans to close up to half its 29 European breweries within a decade and announced in its results statement that Germany's Landskron brewery had already gone and the production of BodÆ in Norway stopped.

Western Europe remains easily Carlsberg's biggest market but the region only supplied 65 per cent of group sales in the first half of 2006, compared to 67 per cent in the same period last year.

Asia's contribution rose from 3.7 per cent to 5.5, while BBH supplied a fifth of Carlsberg's sales, up from 18.7 per cent last year.