Trump politics: potential impact on brewers has analyst guessing

Looks like things are brightening up for Russia’s brewers. In 2016, beer sales in Russia declined only between 1 and 2 percent estimates Frans Hoyer, an analyst with Denmark’s Jyske Bank, who has been following the brewer for the past 40 years.

He bases his estimates on ruble strength and improved consumer confidence. In this respect Mr Hoyer is slightly more optimistic than Turkish Efes, the number two brewer in Russia, who said in January 2017 that the beer market declined in the low to mid-single digit.

Carlsberg will report its full year results on 8 February 2017.

“There are a number of signs that things are improving for Russia and that is good news for Carlsberg,” Mr Hoyer said. “It may also be fair to speculate that the international sanctions on Russia are moving closer to an end,” he was quoted as saying.

Carlsberg’s Russian business represents the biggest acquisition for Carlsberg to date. Russia was once its brightest star, generating almost half of operating profits in 2009 before the market went into its seven year long tailspin. Carlsberg now only gets about 20 percent of its operating profit from there.

The new political landscape is changing, especially since Mr Trump, who has frequently expressed his admiration for Mr Putin, won the US election. If Mr Trump were to help lift sanctions against Russia, Mr Hoyer speculated, this would benefit Carlsberg.

A better Russian market wouldn’t just boost sales there. If Carlsberg’s management did not have to constantly put out fires in Russia, it could also free up resources to do better in other regions, Mr Hoyer said.

As with lots of Mr Trump’s statements, Russia is still a case of wait and see.