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Carlsberg’s chief executive warns that the impact of US tariffs on already weak consumer spending means “no winner” despite Danish brewers being “insulated” from the direct tax fallout.
Carlsberg’s CEO Jacob Aarup-Andersen told the Financial Times that the brewers only sell small amounts of beer to our consumers, which is largely protected. But he warned: “We see it with the same concern as everyone else.
European companies with little direct exposure to President Donald Trump’s tariffs on US imports support themselves due to aftershocks, which include the effects of already vulnerable consumer trust, inflationary pressures and circumvented exports in demand for materials and raw materials costs.
“There are no winners, but from Carlsberg’s point of view, this doesn’t have a significant impact,” Aarup-Andersen said. The US accounts for less than 0.1% of Carlsberg’s total volume, making up the majority of its operations in Europe and Asia.
Carlsberg chief Jacob Alup Anshan said the “big unknown” in the sector is ©Carsten Snejbjerg/Bloomberg
Trump suspended “mutual tariffs” in most countries announced earlier this month, but has been struck by sudden collections on China and is stuck at 10% tariffs on most goods from other countries.
Aarup-Andersen says that consumers are now curbing “more than half of more than two years,” and that this is unlikely to change given geopolitical uncertainty, putting pressure on companies trying to accumulate sales volumes.
Like other consumer goods sectors, Carlsberg raised prices to pass higher product costs to consumers during periods of runaway inflation. However, customers have begun to rise and costs have risen, reaching company sales.
Barclays analysts said China’s retaliatory tariffs on US goods could also hit Carlsberg harder than their rivals, given its 18% sales exposure to China. In a recent memo, they wrote that the collected tax on US goods could “consumers in China) extend their pockets and lead them down and overlooking them.”
Carlsberg plans to report a 0.4% decline in group organic sales volume and a 0.5% revenue growth rate in its first quarter trading update next month. In 2024, we reported a revenue growth rate of 1.9%, DKR75BN ($11 billion).
A Danish executive who took the helm in Carlsberg in 2023 said the “big unknown” in the brewing industry is what happens to the cost of raw materials involved in beer production, such as aluminum, glass and barley.
The US slapped a 25% tariff on all imported canned beer, in addition to tariffs on steel and aluminum products this month, causing a surprise among European and Mexican brewers with a large US export market.
Aarup Andersen said the impact of the new tax on commodity prices remains unknown. “It really depends on where the tariffs end, and that’s the analysis we all do at the moment,” he said.
The company is also looking for the impact of additional raw material supplies entering Europe that would otherwise have been destined for the US. Oversupply in Europe would lead to lower prices “on paper,” but “but I think it’s too early to call it,” Aarup Andersen said.
The trade shift will occur as Carlsberg pivots his portfolio towards soft drinks, non-alcoholic, low-alcoholic beer, and more expensive beer brands like Grimmbergen and Brooklyn Lager.
“I don’t run a business where I have to sell alcohol to you, and we want to make sure that in that moment we sell the product you want,” Aarup Andersen said.
Half of Carlsberg’s sales now consist of low- and no-alcoholic products, since the brewers completed the £3.3 billion acquisition of British soft drink group Britvik in January.
Aarup Andersen said it not only made the acquisition to expand Carlsberg’s UK business, but also circumvented into a faster selling category. Britvic’s brands include products such as 7UP, J20, and Energy Drink Rockstar.
“Britik is exposed to a higher growth category than the traditional beer category,” he added. “And we’re turning our business towards strategically growing categories and maintaining a strong core about our brewing business.”
