E-Malt.com News article: 3592

Sweden: As from 4 November 2004, Executive Vice President Paul Bergqvist takes up the position as Managing Director in Carlsberg Sverige AB, replacing the former Managing Director of the Swedish activities, Lars Påhlson, Carlsberg A/S announced. At the same time, Vice President Geir Nesheim who has been working with M&As and Group projects takes up the position as CFO. The change in management is due to an unsatisfactory development in the Swedish business.

Paul Bergqvist will remain a member of the Executive Board, and the development and management of the activities of Baltic Beverages Holding AB (BBH) will also remain part of Paul Bergqvist's area of responsibility. Following significant restructuring this year, Carlsberg Sverige AB was expected to show progress compared to last year. However, the past months have indicated that the expected improvement in operations has not taken place, and this means that Carlsberg Sverige AB is now expected to realise a negative operating profit this year. In order to reverse the trend as fast as possible, further restructuring measures are initiated for which provisions of approximately DKK 100 million will be made in Q4 for severance payments to approximately 200 employees, etc. Negotiations with the Swedish trade organisations will now be initiated.

An extensive action plan focusing on the problem areas identified in Carlsberg Sverige AB has been worked out. Significant areas of this plan include increased commercial focus on the most profitable product lines and adaptation of structures and processes to current market conditions. During recent years, the Swedish beer market has witnessed several structural changes and particularly the heavily increased illegal import of beer has led to significant decline in market volume. The development in illegal import is not least due to the very high Swedish duty level, which has also led to a considerable loss of workplaces in the brewing industry in Sweden in the past years.

Furthermore, consumer preference has shifted from branded beer products toward the discount segment. This has an adverse effect on the development in the beer industry in general and together with the increase in illegal import, this recently led to the closing-down of the brewery in Bromma in Stockholm. According to Paul Bergqvist, "Sweden is an important market to Carlsberg and naturally it is of high priority to us to gain control of the development and establish a profitable business model. The Swedish market has been a difficult market for several years, however, I believe that we have all prerequisites to achieve commercial success. The goal for the next three to four years will be to improve earnings and to achieve an operating margin above 10%."


05 November, 2004