Russian Carlsberg branch suspends beer production at Chelyabinsk brewery

MOSCOW, Sept 29 (Reuters) – Baltika, the Russian subsidiary of Denmark’s Carlsberg, has suspended beer production at one of its breweries due to falling demand, it said on Monday.

“This is connected with the end of the peak summer season and the beginning of autumn, when demand for products is down,” Mairbek Sageev, director of Chelyabinsk’s Baltika brewery, said in a statement sent by mail. email to Reuters.

“Furthermore, this factor was reinforced by a significant decline in the total beer market.”

The brewery, east of the Urals roller coaster, is one of 10 breweries in Baltika. It has a production capacity of 4.2 million hectoliters per year and produces the Tuborg licensed brand as well as national brands such as Baltika.

Sageev said the brewery would resume full operations once the market improves.

According to Baltika, the beer market in Russia fell by 24% between 2008 and 2013 and another 7% in the first half of this year alone.

“The main reasons for the fall stem from excessive and unnecessary state regulation of the brewing industry and a deteriorating macroeconomic situation in which consumer sentiment and the economic outlook are highly uncertain,” Sageev said.

As part of a campaign to reduce alcohol consumption and promote a healthy lifestyle, Russian President Vladimir Putin has ordered a ban on beer sales at street kiosks and time restrictions on the when beer can be purchased.

The stagnation of the Russian economy, which is expected to grow by only 0.5% in terms of gross domestic product this year, down from earlier official forecasts of up to 3%, has put pressure on the portfolios of consumers.

In August, Carlsberg cut its 2014 profit forecast and said its Russian beer sales fell by a fifth in the second quarter. The 167-year-old Danish brewer depends on Russia for more than a third of its operating profit.

Carlsberg was forced to operate most of its Russian units at reduced capacity for several months, although the company pledged in June to keep its Russian breweries in operation. (Reporting by Maria Kiselyova and Lidia Kelly; Writing by Lidia Kelly; Editing by Alexander Winning and Mark Potter)

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