Carlsberg's 50 %-owned Baltic Beverages Holding (BBH), the brewer of Russia's top-selling Baltika beer, saw nine-month EBITA falling 17 % to 853 million crowns due to exchange rates and the fact that sales prices have not been raised in line with inflation -- a problem it expected to remain in the coming two quarters. Britain's Scottish and Newcastle holds the remaining 50 % in BBH. "We had expected a quicker turn-around in BBH than we've seen and this is the cause to the downgrade," said Andersen, referring to falling sales in the first quarter.

Russians drank 6% more beer in the third quarter compared to the second quarter, with BBH's volumes up 11 %. For 2003 the overall growth forecast was lowered to 4 to 5 %, with BBH expected to outperform that. Next year, the Russian beer market was expected to grow around 5 %, still with projections of Carlsberg growing faster than the market.

"The growth case in BBH seems to be showing signs of weakness," said Nordea Securities senior analyst Stig Frederiksen. Nine-month net sales fell 3% to 26.2 billion crowns, trailing a consensus market forecast of 26.5 billion.

Carlsberg A/S, the listed holding company which owns 60 % of Carlsberg Breweries, fully consolidates Breweries and breaks out its share of profits at the net level. Carlsberg A/S's nine-month net profits fell 6% to 841 million crowns, above the expected 739 million, but were expected to fall 10 % for the full-year. Norwegian conglomerate Orkla, which also reported results on November 7, owns the rest of Carlsberg Breweries.

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