World: Carlsberg reviewing its global media business

Carlsberg Breweries, parent to beer brands Carlsberg, Tetley and Tuborg, has started a review of its £150 mln global media business, including its £1 mln UK account currently handled by OMD, Media Week posted on October, 1.

The review includes 24 major markets for the brewery, including the UK, Scandinavia, Germany, Italy and Russia in Europe and Malaysia, Hong Kong and Singapore in Asia.

The company is looking to consolidate and create cost efficiencies where possible.

Omnicom’s OMD is the only group incumbent in Europe and is defending the business against a number of other local incumbents.

A Carlsberg spokesman confirmed the longlist has already been selected and involves more than four major agency networks.

The pitch process is being led by Carlsberg senior vice president, sales and marketing Khalil Younes, who joined the company from Coca-Cola at the start of the year.

A source confirmed the media review is worth billings of more than £100 mln but less than £200 mln. The group spent just £1 mln on media in the UK in the last 12 months to 31 July, according to The Nielsen Company - although the company's valuation of £20,000 online is believed to be significantly lower than actual spend.

Carlsberg's spend across Europe has fallen in the past five years as it has switched spend from traditional TV ads into online and viral films.

The group out-performed the market to deliver a strong performance for the first six months of 2009 with strong cash flow growth, margin improvement and organic profit growth.

Free cash flow increased to DKK 4.1 bln, operating margin improved to 15.1% (compared to 13.1% in 2008) and for beverage activities, organic operating profit growth was 26%.

The group credited its intensified focus on efficiencies as more than off-set the ongoing market challenges.

In September, Carlsberg UK extended its sponsorship deal with the Football Association to remain the "Official Beer" of the England team and The FA Cup.

The new four-year football agreement covers the Euro 2012 and 2014 World Cup tournaments and follows Carlsberg’s decision to part ways with Liverpool Football Club after 17-years at the end of this current season.

02 October, 2009