Denmark: Carlsberg downgraded to neutral

Denmark-base brewer Carlsberg was downgraded to neutral from overweight at the beginning of this week by J.P. Morgan Chase, MarketWatch reported on October, 12.

Risks are increasing for Carlsberg in Russia "with no visibility on underlying market growth", J.P. Morgan Chase said.

A draft bill under consideration in the Russian parliament proposes to increase taxes on beer by 200% in 2010. The bill also includes an increase in 2011 of 11% and a 20% increase in 2012.

It is hard to estimate the elasticity of demand in the Russian market, J.P. Morgan said, adding that it now forecasts only single-digit earnings growth next year for Carlsberg.

The Danish company owns Baltika Brewery and is number one in the Russian market with a 38% market share.

14 October, 2009