Carlsberg's fourth-quarter sales may have missed expectations, as the Danish drinks giant comes to grips with difficult market conditions in Eastern Europe, however its chief executive remains confident on the company's overall results and future.
"At the end of quarter four, Russia was a bit weak – that has a cause (with there being) a ban on big bottles," Carlsberg CEO's Cees 't Hart told CNBC Wednesday, adding that with the ban starting on January 1, 2017, the brewer had to prepare for the changes during the second half of 2016.
"So what you see is in quarter three is strong sales and in quarter four, low sales in anticipation of and being prepared for that ban, and that has caused some lower sales in Russia but for the rest we are satisfied about 2016. It was a good year for Carlsberg."
In June 2016, Russian lawmakers passed a law that would limit the size of plastic beer bottles to 1.5 liters or less, as part of the government's effort to curb alcohol abuse. The law came into force for industrial production at the beginning of 2017, while for retail sales it's expected to come into effect on July 1, 2017, Reuters reported.
Overall for Carlsberg, the Russian beer market showed a decline of 1 percent to 2 percent for 2016 overall, with a greater drop of 4 percent coming in for the fourth quarter.
The drinks giant did note that while warm weather boosted market development in the second half of 2016, and Russian shipments rose 1 percent for 2016, the overall challenging macroeconomic environment in Eastern Europe impacted the company during 2016.
Net revenue for Eastern Europe came in at 2.33 billion Danish crowns ($335 million) for the fourth quarter.