The return of Mr Fix-it – Comment
Mr Burgard is not to be envied. He has been given the task of turning around Carlsberg’s German business (Holsten, Feldschlösschen) in order to meet profit margins.
From what we have heard on the grapevine, Mr Croseck did not try hard enough to achieve that goal and fell for the easy solution to this complex demand: rather than fixing things, he decided to sell and kill.
It was under Mr Croseck’s stewardship that a cost saving and profit maximising strategy was devised which included selling off the supermarket own label brewing business located at the Braunschweig Feldschlösschen brewery to Germany’s king of discount beers, Oettinger, in June this year.
Had it not been for the economic crisis, which has depressed Germany’s real estate market, Mr Croseck would have already closed down the Holsten brewery in Hamburg and sold the land to a developer.
Apparently, this fate is lying in store for Carlsberg’s Feldschlösschen brewery in Dresden. The reason? It is surplus to requirements.
In the long run, market observers believe that Carlsberg will limit itself to operating just one brewery in Germany, which is the Lübz brewery. The brewery in north-eastern Germany will become its anchor brewery – a euphemism for “the one and only” – with the remaining volume being brought in from across the nearby Danish border, where Carlsberg has its Fredericia brewery.
As far as we at BRAUWELT International can tell, Carlsberg’s Danish management in Copenhagen has decided that to operate in the whole of Germany is not worth the effort. Carlsberg’s policy for Germany seems to be a regional one with the focus on northern Germany, which in military terms would be called Carlsberg’s “glacis” – the reclaimed territory around Carlsberg’s Nordic Fortress, where intruders will be fought.
In this regard, it makes perfect sense that Carlsberg Germany set up a 50:50 distribution venture – Nordic – with the distributor Nordmann in spring this year. Having recently received the regulators’ go-ahead, Nordic will be the largest distribution business in northern Germany.
Branching out into distribution was the logical next step for a brewer which has decided to limit its geographical reach. By expanding vertically into distribution Carlsberg Germany obviously hopes to protect its market and widen its margin. Brewers’ margins in Germany are notoriously small.
Had it not sold the Braunschweig brewery, Carlsberg Germany would have produced 5.7 million hl beer this year. Because of the sale, volumes will drop to about 4.5 million hl beer.
