Investors bet that Carlsberg’s share price will drop further

Since the end of November 2014 Carlsberg has seen 15 percent of its market capitalisation wiped out. On 12 January 2015 it was valued at DKK 74 billion (EUR 9.94 billion/USD 11.7 billion). Some analysts estimate Carlsberg’s value could decline by another 10 percent this year. So far, Carlsberg’s efforts to reassure investors it can weather continued losses in Russia have shown little sign of working.

Media reported in early January 2015 that, as the biggest brewer in Russia, the Danish company was pummelled by a 39 percent slump in the ruble against the euro in 2014 - the worst decline of all currencies except for Ukraine’s hryvnia.

Speculation that Carlsberg won’t be able to bounce back from the currency shock has led to a surge in bets (“shorts”) that the company’s shares will decline further.

Short interest in Carlsberg rose to 4.7 percent of the company’s free-floating stock on 6 January 2015, which is 11 times the level recorded less than half a year ago, according to data compiled by Markit and Bloomberg. None of the world’s three largest brewers – AB-InBev, SABMiller and Heineken - has short interest above 1.8 percent, according to Markit.

Carlsberg refrained from commenting on the short interest.

Carlsberg’s unit Baltika is the market leader in Russia with 10 breweries. Analysts say that four breweries have now ceased production - in December Carlsberg told Brauwelt International that only two had stopped.

Carlsberg generates about one-third of its profit in Russia and Chief Executive Officer Joergen Buhl Rasmussen said late last year that the brewer doesn’t expect a quick recovery in its biggest market.