Baltika halts Chelyabinsk brewing
Declining demand hits Baltika Breweries output
Carlsberg has confirmed that its Chelyabinsk brewery, one of 10 Baltika Breweries’ plants in Russia, has suspended beer production.
A company spokesman said production would resume based on market demand.
He told Brewers’ Guardian: “Carlsberg can confirm that one of the Baltika breweries in Russia has temporarily ceased production. Production is expected to resume as required by market demand.”
Reuters reported that production at its Chelyabinsk brewery had been halted due to falling demand, and a significant drop in Russia’s total beer market. It also cited an “excessive and unnecessary state regulation” of the industry and a deteriorating macroeconomic situation.
Last year, Russian President Vladimir Putin introduced a law restricting the amounts of beer and time that it can be sold from street stalls and kiosks across the country.
In its 2014 half-year results, Carlsberg said its volume market share declined by 37.4% during that period, citing a temporary disruption in sales which had resulted from a change in Baltika Breweries’ legal structure as a main reason.
In August, Carlsberg also cut its 2014 profit guidance as its Russian beer sales fell by one fifth in the second quarter.
The Chelyabinsk brewery, which is located to the east of the Urals, has a production capacity of 4.2 million hectolitres per year and produces both the domestic brand Baltika and the licensed Tuborg brand.
Carlsberg has been operating most of its Russian units at a reduced capacity for several months.