Danish brewer Carlsberg reported on Tuesday a "solid" start to the year in China but warned that US tariffs could affect both consumer spending and raw material costs going forward.
Carlsberg, the world's third largest brewer behind Anheuser-Busch InBev and Heineken, maintained its outlook for the full year despite reporting first-quarter sales slightly below expectation.
Earlier this month, Heineken also kept profit forecasts for the year unchanged despite a decline in sales in first quarter and noting increased uncertainty from tariffs.
Carlsberg reported higher first-quarter revenue after the acquisition of UK soft drink company Britvic, but beer volumes fell following its loss of San Miguel distribution rights in Britain.
Carlsberg said sales reached 20.1 billion kroner (£2.29 billion) in the first three months of the year, a 17.4 per cent jump from the same period in 2024.
Volumes, however, fell 1.6 per cent as it lost the contract to produce San Miguel in Britain.
“It was a soft start to the year, impacted by the loss of the San Miguel brand and continued subdued consumer spending in an environment with increased macroeconomic volatility,” said Carlsberg chief executive Jacob Aarup-Andersen.
Carlsberg had not yet seen a deterioration in consumer behaviour in April, when US president Donald Trump announced sweeping tariffs, Aarup-Andersen told Reuters.
"But history tells us that prolonged uncertainty will feed into consumers' purchasing decisions," he said.
Carlsberg has little direct exposure to Trump's tariffs on US imports, as the United States only accounts for a small fraction of its overall sales.
However, businesses have warned of aftershocks that could dent consumer confidence globally, stir inflation, and raise the costs of materials.
Carlsberg's business units were strategising around the possible impact on prices of raw materials like barley, sugar and aluminium, which could rise or fall in different regions as a result of the tariffs, Aarup-Andersen said.
While no company was entirely protected from tariffs, Carlsberg represents a relatively safe harbour for investors thanks to its minimal US exposure, said Henrik Hallengreen Laustsen, analyst at Jyske Bank.
"They may be a bit of a winner," he said.
Carlsberg said it still expects between 1 per cent and 5 per cent growth in organic operating profit for the current year.
Volumes in China, Carlsberg's biggest market, grew 2 per cent driven by its premium portfolio and sales in big cities.
However, sales of local mainstream brands in the western part of the country were hit by weak consumer sentiment, it said.
The Chinese beer market contracted 4 per cent last year, with a further estimated low-single-digit percentage decline in the first three months of this year, Carlsberg said.
Aarup-Andersen said Carlsberg expected consumers in China to remain subdued, but demand would improve slightly from last year.
In addition to its flagship Carlsberg brand, the Danish group sells Brooklyn, Kronenbourg 1664 and Tuborg.
Carlsberg completed the acquisition of Britvic in January. Britvic has a distribution deal with Pepsi in the UK.
(Reuters)
