Carlsberg Brewery Malaysia Bhd expects the duty-paid beer market in 2004 to be “flat” or even be on a decline due to the 10% increase in excise duties on liquor in Budget 2004 and smuggling of beer products in the peninsula, according to The Edge Daily.
Its marketing manager Jan Hertz said the duty hike was impacting Carlberg’s sales. However, he said the detailed figures could only be revealed when the financial results for the fourth quarter ending Dec 31 were released. He said the duty increase had encouraged the growth of smuggled beer market because consumers were price-sensitive. “When they feel the prices going up, they will migrate to cheaper products. That’s something we are very worried about.”
“That’s why we are taking a lot of initiatives to drive the sales further. But we are looking at a flat market or even a decrease in the beer market next year,” he said after launching Carlsberg’s new can design in Shah Alam yesterday.
Despite a slow growth expectation, Hertz said Carlsberg would work to defend its dominant position in the beer market.
“We are enjoying a market share in the high side of 50s. We will try to maintain our position by staying relevant by recruiting younger drinkers and keeping our loyal core drinkers,” he said.
In April, Carlsberg reportedly enjoyed a 64% market share for duty-paid beer segment. Its chairman Datuk Jorgen Bornhoft had said then that the brewer would not mind making less profit for the short term if that was necessary to defend its dominance amid a price war in the market. Herzt said the new can design was an effort by Carlsberg to benefit from higher beer sales expected in January, the month of the Chinese New Year festive season. “The new design has been quite a long process. It took us about 18 months to come up with it. “Canned beer is a big seller in festive seasons. That’s why we want to get it in before the Chinese New Year,” he said. It is estimated that 30% of all beer sold annually is in cans.
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