The Latest Victim Of The Ukraine Crisis: Beer

Tyler Durden's picture

Everyone knows that when it comes to apologists and scapegoats, Q1 was all about weather excuses, and as SocGen already showed earlier today when it took a $730 million charge on its Russian subsidiary, Q2 misses will all be Ukraine's fault, which is ironic because as recently as a month ago experts were screaming over each other how little Ukraine matters for the global economy, how meaningless Russian exposure is to western banks and so on. But while one can at least superficially justify a bank provisioning against deposit flight and the accumulation of bad debt in a country in which paying one's debt is the last thing on the population's mind, a new and quite different victim of the Ukraine crisis was revealed earlier today when beer titan Carlsberg swung to a net loss and issued a profit warning: beer.

One would think revolutions and civil wars are bullish for thirst and alcohol consumption: after all it is far easier to charge a tank when hammered than sober. However, when it comes to beer at least, one would be wrong.

As the WSJ explained, the reason why Carlsberg - the fourth largest brewer in the world - had some less than pleasant words about events in the Ukraine, "the Danish brewer has built up a significant exposure to Russia in recent years, driven by beer brands such as Baltika and Tuborg, amid a wider bet it has placed on Eastern Europe." The bet got so big that Russia is now its largest single market. And now comes the hangover.

The world's No. 4 brewer downgraded its full-year outlook for net performance to reflect Russia's fragile economic situation, saying it now expects net profit to grow by a low-single-digit percentage in 2014, instead of the mid-single-digit percentage it previously expected. The ruble's weakness against the euro, along with currency headwinds in some other markets, is a key reason behind the downgrade.

To be sure Obama did warn of "costs" in Russia, but as we have noted repeatedly, he did not clarify that the costs would be borne by western companies.

That said, Carlsberg decided to go for the kitchen sink approach, and in addition to blaming the Ukraine crisis also reached for that old standby, drumroll, "poor weather." And just to seal the trifecta of excuses, it also threw in the slowing Chinese economy in the bucket.

Carlsberg was also hit by poor weather conditions in China and a weak economy in Vietnam. It said organic growth conditions, excluding the impact of foreign exchange, remains strong and the performance of its premium labels is strengthening.


"Included in the outlook is a more uncertain macro situation in Russia and Ukraine," the company said. Interruptions in Ukraine were very limited through March 31, but the brewer has had to stop production at times in recent months and the government at the beginning of May boosted beer excise duties by 43%, leading to price increases of 5% to 6% for Carlsberg products.

Considering that the company reported a 14% net revenue decline in Eastern Europe in the first quarter compared with a year earlier, and its overall operating profit fell by about a third, perhaps there is a more systemic reason for the plunge in demand for its products: such as the locals, not only in Russia but elsewhere, simply no longer have the discretionary income to afford its products. Indeed, the facts bear this out:

Even before the crisis in Ukraine, which has affected many European companies with a presence in Russia, brewers were struggling due to regulatory changes and other factors that pulled the overall Russian beer market down. Last month, Dutch brewer Heineken NV, one of Carlsberg's main rivals, reported a 37% fall in first quarter net profit, citing "challenging beer market conditions in Russia."

But let's not focus on this too much as it would destroy the entire narrative that the reason why some $50 billion in projected growth was wiped out from the $17 trillion US economy had to do with "harsh weather."

As for Asia, apparently it snowed in China and Japan too. And when it snows there, nobody drinks beer.

Group beer volumes for Carlsberg declined 3% during the first quarter, as organic growth in Western Europe was offset by declines in Eastern Europe and Asia. In addition to unfavorable weather conditions in Asia, Carlsberg also pulled back from unprofitable volumes during the quarter.

But before we cry for Carlsberg we are confident that the company, which certainly has the balance sheet for it, will be raided by some activist who demands it stop expanding here and there and instead use the bulk of its cash to buyback its stock - after all what better way to give the false impression that all is going swimmingly with a company than it levering up and using the proceeds to be even more shareholder friendly.

Finally, as for end demand, this is Russia we are talking about: if anything, what is left unsaid here is that the locals, who may indeed have shunned beer, have simply moved on to cheaper, and more concentrated alternatives. Speaking of, is Popov vodka public?

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NoTTD's picture

This means war.

Pool Shark's picture




[Somehow that must violate the Geneva Convention...]




Ying-Yang's picture

The FBI is not ONLY in the Ukraine........

Pakistan police question American after FBI arrest

A law enforcement official in the U.S. identified the man as an FBI agent and said he was in Pakistan as part of a multi-agency, anti-corruption program. The official said the agent appears to have made a mistake and that there's no indication he was trying to carry bullets aboard the plane.

Wow our FBI guys are everywhere!

kchrisc's picture

Corzine is in Pakistan?!

Wow, the efforts that they will go to in order to hunt him down.

SoilMyselfRotten's picture

They cut off the beer nuts and i'm enlisting


Relentless101's picture

Article 2E.

Thou shalt not fuck with thy beer production.

MeMongo's picture

Nobody Worry! Mongo will do everything in his power to RE-Hypothecate this industry

Manthong's picture

Eastern Ukraine had better start drinking up.

The empties are needed for incendiary service.

gcjohns1971's picture

Does that mean that if we send them massive shipments of beer all the empties will be filled, and there will be no more fires?

tony wilson's picture

no transgender western  faggot.

this does not  mean war

this means wodka

Charles The Hammer Martel's picture

NOT CARLSBERG! The Russians are sure to fold up and go home now

Charles The Hammer Martel's picture

This is also great news for Stolichnaya Vodka

IndyPat's picture

No shit. Beer if fine, but liquors quicker, comrade.
I'm sure when Vlad and Angela broker the "merger", the Russians will finely get some decent beer and Germany will be able to keep the lights on and the cars moving.

CPL's picture

Where do you think most of the hops for all the Beer in Europe comes from?  Alternatively the largest producer of grains to malt for beers, whiskey's, sweet ports, etc, etc, etc. 

Europe is now on the wagon, starting whenever the last of the summer wine is gone.  Game on.

kchrisc's picture

Time for Hopfensraum?!

CPL's picture

You can drink it all at once or stagger it, doesn't matter.  Up to you.  Just sayin it's going to be a long time before people have a cheap and far too easy excuse to act like an asshole and hide in a bottle.  

Oh and wine press grapes aren't going to do too well either.  New type of Phylloxera that is incredibly tenacious is tearing ass through vineyards, should be about...everywhere...about now.  Should save everyone the trouble of listening to the self-anointed vintner at dinner parties detailing the history of what amounts to a long pee.

Protip:  For vodka... I wouldn't be drinking your future fuel source.  It's a pain in the ass pushing an car with an empty gas tank when drunk.  Much easier if it goes in the tank.

Overfed's picture

Luckily the larger malthouses in the US (ADM, Briess, Gambrinus, Great Western, etc.) source their grain from N. America. There are hops grown all over the place here in FEMA region X. We'll be OK, fuck the EU. ;-)

CPL's picture


I'm saying that easily accessible, cheap alcohol in general is going to get a little harder to make without a couple of key ingredients.  Forever. 

It's one of the most destructive retail items on the planet and serves zero purpose unless putting it in a gas tank.  It's the cause of the majority of social issues, public damages, riots, 2 am fights, spousal beatings, a large percentage of divorce cases, coyote ugly regret, destroys communities, etc.  Just ask a cop what 90% of their "social calls" are related to.  It's certainly not crack dealers like TV tells everyone, it's most always booze.

Historically it was to make sure people didn't die of scurvy or dysentery because the water was bad in an area, so it was cut with alcohol to kill the bugs in it.  Today, anyone can buy a straw filtration device for under 10 dollars and sip straight sewage without getting sick.  The technology is old, and old things go the way of the dodo.  Alcohol, for drinking, is now officially antiquated thanks to the widely accessible and common water filtration system.

If you need it, learn to use a still or make friends with someone that know what they are doing.  There just won't be base materials to provide any level of retail of alcohol at the same scope as given today.  This is the last of the summer wine.  It sucks for those that do drink.  But it really wasn't helping anyone, so take it as the opportunity to have an excuse to go dry for a while (like forever). 

In the meanwhile, try the following phrases on for size since everyone will have an excuse soon;

  • "I don't make enough to drink."
  • "I don't want to run around town trying to look for bottle of wine for the guests.  it simply doesn't exist honey."
  • "I don't know anyone that has any or knows how to make it."
  • "Hand sanitizer goes down smooth, I hope my vision returns."

Game on.

Overfed's picture

First of all, that's just heresy. Second, you vastly underestimate just how many things can be fermented into alcohol. Even if there were no barley or wheat or grapes, there are Himalayan blackberries, plums, apples, and pears growing all over my property and on the surrounding land. There WILL be booze.

CPL's picture

You understand it's already been happening.  Certain things are just going to be removed fro the menu.  Those that can make booze, you are going to be everyone's best friend and charge whatever you feel like.  Understand though there is a reason you get to read these news articles from time to time.

Fake vodka 'can kill you' warning to Christmas shoppers

Once fuel does all that cheap, easily accessible booze.  Because morons have been making GMO monsters that sit in a bottle, mother nature retailiated at the right time to knock most of the old methods of booze production into the ditch.

Yes there are plenty of other ways to make booze.  You could make mead but all the honey bees are dead, or dying.  Or you could make carrot liquor, but I willing to bet it'll go down as friendly as a warm V8 on a hot day.  Or apple cider, but most of the apple orchards that provide the apples died from a drought a couple years ago. 

Point being; most alcohol like Beer and wine, don't count on them being around past the summer.  Verdict is out on yeast being aroud as well, there's something strange happening to most of the GMO yeasts used in booze production thanks to all the extra radiation.

I'll wait for that gem to surface after the news agencies actually do their job.  But here's some of the science.

Your dick will stop working is the short version.  The future is flacid as well as sober.  Drink up and game on

willwork4food's picture

Dang CPL, I did not know you were anti-alc. If done responsibly it is actually good for you, fun, relaxing and gives you a new outlook on life.

But damn those orange shandies go down nice...

CPL's picture

No, I just don't drink, people drink around me and I could care less.  Personally can't afford it on many levels.  And Europe is a beta site for going dry.  I suggest everyone watch closely, because that's your future as well.

willwork4food's picture

No offense attended, but do you know Bill W? I did, for 20 years, then said fuck's too short.

MeMongo's picture

Hey cpl in this life, with these issues....Fuck you!


Oh yea cpl and  also it's "couldn't care less" you cunt!

tip e. canoe's picture

good stuff rasta

didn't know that about the yeast.
the malts for sure all GMOed unless you know your brewer or grow it yourself.

one other productive use for vodka : herbal tinctures.
a drop or 3 a day keeps the bugs away.

Tao 4 the Show's picture

Maybe the Law of Unintended Consequences is at work. Turns out that using hops in beer making is only a few hundred years old and resulted from a beer recipe monopoly war having to do with the Catholic church. There were many herbs used in the past, some of which were sexual stimulants and/or slightly mind altering. Hops was a replacement herb that is actually bad for men (especially the prostate) due to anti testosterone effects, not to mention that it is sleep inducing (really makes one the life of the party). Some companies are trying to go back to older recipes, I hear, though have not had a chance to try any of these.

Before the Beer Purity Act of 1516, almost all beer was made with something called Gruit, which is a combination of yarrow, bog myrtle, and marsh rosemary. The Protestants were trying to break the Catholic monopoly on beer making and so introduced hopped beer. Pilsner beer was originally made with Henbane, which is psychoactive. The German Beserkers would drink it before battle! (Damn, are we boring these days, or what.)

Overfed's picture

Hops are good for you and have been used in beer for nearly 1000 years. Not only do they make it tasty, the alpha acids are very destructive to gram-negative bacteria, making them a good preservative. If you're drinking enough beer that the hops are having a deleterious effect on you, you would likely be dead from liver/kidney failure or alcoholic cardiomyopathy.

Tao 4 the Show's picture

No problem with what you are saying, but check out the estrogenic effects of Hops. Not good for many men for this reason.

Overfed's picture

Fair enough. But, it takes pretty large quantities. And phytoestrogens can actually be helpful for maintaining bone density and for fighting some cancers. I'd call it a push.

Tao 4 the Show's picture

I will add a little to put a fine point on it. Hops is touted as a possible anti-prostate cancer ingredient. So, for this reason, it can be positive. OTOH, if someone is suffering from BPH, it can make the situation worse. A big factor in BPH is growth stimulated by activation of the estrogen receptors.

willwork4food's picture

Gentlemen, would 9 or 10 BPD be unadvisable for someone diagnosed with stage 4 renal carcinoma after 50% liver removal?


MeMongo's picture

What the fuck is with you pussies? Beer and most quality spirits is quintessential to a melodic stress free life style! I'm with the big crazy Viking fucks who ate a shit load of good food, drank wine and spirits and then just puked it all up in a bucket and went back for more. Fucked some who-ores and replayed it all again the next night! But oh my God you little panty wastes where oh where was the tofu? Fuck right off!

tip e. canoe's picture

ground ivy was also used to make what i believe was called alehoff. thing about ground ivy is that it grows like mad with very low maintenance.

whereby hops is seriously high maintenance. still love it though.

+1 for the info on the estro. didn't realize it was that heavy in it.

just found this

didn't realize you could use mugwort as well. cool, i've got an entire crop of it! give it to my female friends that time of the month.

Steaming_Wookie_Doo's picture

Maybe Carlsberg corp owns Baltika, but it's produced in St.Petersburg. That it's not getting in to Ukraine is no surprise. 

As for Stoli, it's gonna be fine. Of course most Russians (and eastern europeans in general) know how to make their own moonshine anyway (Samagonka, Schmakovka). Beer isn't generally made at home except for some very weak brew consumed in the summer time.

So far this year's excuse calendar:

Jan - April "weather, snow" (who coulda known it!)

May - Aug "Ukraine"

Aug - Dec ?????   (asteroids? aliens? Barry's out golfing?)


Continue With This's picture

You are right about the fact that Eastern Europeans make their own moonshine.

Hungarians mame very good Palinka.

Romanians make very good Tuica.

Croats and Serbs make the best Rakia.

Poles make some great Slivovitz.

Ukranians make a very good Horilka.

blabam's picture

All this trade is getting in the way of woar!

LawsofPhysics's picture

Well, if the other efforts by the west  to start a proxy war won't work, this should do it.

Continue With This's picture


Probably the best head of state in the World.

centerline's picture

King of the sociopaths.  Quite a title.

gcjohns1971's picture

You can't criticize Putin on ZH.

He has a lot of girlfriends here.

Their cynicism is focused on whomever they're told to focus it.

I wonder when they will understand the that lack of critical thinking and cynicism is what earned them their lovely Western leaders in the first place?

Or that repeating that uncritical adulation will, with 100% certainty, earn an encore with their flavor-of-the-week?

There is a lot of smoke and overt human rights abuses behind the Putin regime that have gone unremarked only because the USG and much of Europe have gone full-on Orwell.

Russia is in grave danger of a lot of unnecessary wars and a President-for-Life. 

That didn't end well with the Tsars.  It didn't end well with the Premiers.  It wont end well here.

But... they see the black hats.  So the dazed and confused masses assume whomever the black hats are fighting must wear a white hat.

Wish the world worked like that.  But it doesn't.

TheFourthStooge-ing's picture


You can't criticize Putin on ZH.

He has a lot of girlfriends here.

Yeah, you're right about that. He's got a lot of visceral haters as well. Shills all around. Would you expect anything less from the opening ceremonies of such long anticipated events as The Third World War® and/or The Decline and Fall of the American Empire©?

Their cynicism is focused on whomever they're told to focus it.

As they are shills, this is a tautology.

I wonder when they will understand the that lack of critical thinking and cynicism is what earned them their lovely Western leaders in the first place?

Non sequitur.

Or that repeating that uncritical adulation will, with 100% certainty, earn an encore with their flavor-of-the-week?

Yes, shills will behave like shills, as expected, although I don't understand the point you're trying to make here. Perhaps it could be expressed more clearly in a form other than an ice cream parlor allegory?

There is a lot of smoke and overt human rights abuses behind the Putin regime

Sorry. Don't care. It's not my country, it's not my business. The people there can do what they want. If someone is afflicted with do-gooderism and wants to change the world, that's fine, but not on my dime.

There is a lot of smoke and overt human rights abuses behind the Vichy DC regime that have gone unremarked only because the USG and much of Europe have gone full-on Orwell.

Fixed it for you.

Russia is in grave danger of a lot of unnecessary wars and a President-for-Life.

Sorry. Don't care. It's not my country. That's their business, not mine.

That didn't end well with the Tsars.  It didn't end well with the Premiers.  It wont end well here.

Don't care. Don't care. Don't care.

But... they see the black hats.  So the dazed and confused masses assume whomever the black hats are fighting must wear a white hat.

Well, most people believe what they're led to believe, especially when the official narrative is the only exposure they receive for any given event.

What I find disheartening, yet fascinating nonetheless, is the number of intelligent people who are still unable to break free of the Cold War programming they've been indoctrinated with their entire lives. These are people who understand that the Federal Reserve is bullshit, the War On Drugs® is bullshit, the War On Terra® is bullshit, the PetroDollar is bullshit, the bailout of the TBTF banks is bullshit, the Iranian nuclear scare is bullshit, MERS (the mortgage scam, not the disease) is bullshit, John Corzine unimprisoned is bullshit, the economic "recovery" is bullshit, the whole left/right liberal/conservative democrat/republican paradigm is bullshit, and the news media are bullshit.

Yet as soon as they see or hear the word "Russia", they react at a gut level, without thinking, as if to a post hypnotic suggestion. The word is "Russia", but the autonomic perception is one or more of USSR, the Soviet Union, the reds, the commies, totalitarian dictatorship, Stalin, the bad guys, the enemy, perhaps even Hitler. It's really amazing how it continues to cloud their thinking. The USSR hasn't existed for decades, yet somehow they still cling to it.

Every time the next big threat has come around (the terrists, Saddam Hussein, the financial meltdown, imaginary Iranian nukes, et cetera), I've managed to learn something new. Usually this includes the realization that a long held belief has been wrong the whole time. Now that the threat du jour is The New Soviet Empire (bold italics to make it scary), I've learned a few more things, such as

1) some people still don't see a difference between Russia and the Soviet Union,

2) after Lenin's death, a Russian didn't lead the Soviet Union until Yuri Andropov in 1982,

3) the Bolsheviks were very afraid of, and brutally suppressed, any form of nationalism, especially Russian nationalism,

4) Stalin, a Georgian, forcibly relocated huge numbers of Russians to the Ukraine,

5) the holodomor was imposed not only on Ukrainians, but Russians and Kazakhs as well, and

6) Crimea was a part of Russia until Nikita Krushchev, a Ukrainian, took it from Russia and gave it to the Ukraine.

This has allowed me to understand how the Russians might view the overthrow of the Ukrainian government and the consequences that flowed from it.

Ordinarily, such an event would not be any of my business, except my country is ruled by the regime in Vichy DC, whose subterfuge and treachery were the direct cause of the overthrow. As their stupidity and arrogance are likely, once again, to make things worse for this country and others, it has become my business.

As far as I'm concerned, the adolescents running Vichy DC are more of a threat to the US and the rest of the world than is Putin. My judgement of Putin is based solely on his actions. By thwarting a US attack on Syria, he has saved American lives, as well as the lives of Syrians and others. By convincing Syria to give up its chemical weapons, he probably saved more people from grisly deaths. As recent events in eastern Ukraine and Odessa demonstrate, by facilitating a referendum which allowed the people of Crimea to choose peacefully whether or not to reunite with Russia, he has no doubt saved even more lives.

These actions lead me to believe that, in this circumstance and up to this point, Putin is no villain. Don't tell me about what the Soviets did before Putin was even born. It's irrelevant in this situation. I don't care about the politics, legal system, or internal affairs of Russia. I just don't care. I don't care about Pussy Riot. Fuck Pussy Riot.

So whenever I see someone conflating Russia with the USSR, I can only conclude that they are a victim of inescapable lifelong propaganda, or a shill. When I see someone chiming in to remind us all that "Putin is bad bad bad", again I can only conclude the same. When I see someone pointing out that "there are no good guys here, so Putin deserves no respect", their almost transparent subtlety leads me to believe that they are a shill.

IndyPat's picture

Dead on, 4thS!

Aside from some of your handy work with our favorite Shitizen, that has to be your best comment to date. Summed up my thoughts exactly.

I simply give zero fucks about that whole shitstorm...that we created...and I have to actively and consciously fight my urge to slip into deeply embedded Cold War Programming.

I have a mantra that I meditate on when the urge is strong...

Don't start none, won't be none.
Don't start none, won't be none.
Don't start none, won't be none.
Don't start none, won't be none.

Because if you are a country with nukes, and you find yourself "accidentally" at war...somewhere else other than home turf....then you started something.

tip e. canoe's picture

yeah kicked it old school like he used to do -

precise dissection of an argument.

shemp would make one helluva barrister before the Supremes.

DIgnified's picture

The only thing missing in this life is waking up everyday to "I got you, babe."

Charles The Hammer Martel's picture

The costs Russia is being burdened by are being felt in the West far more than in Russia. Who is going to buy all of those expensive German and Italian cars? Who is going to buy the Champagne? Who is going to provide the caviar and the suasages?

Oh regional Indian's picture

Carlsberg beer sucks/ed...

Sapporo Extra Dry or bust...

Continue With This's picture

The best beer in the World is made by the Belgians.

The Holy Land of The Beer.

The Beer. The Best. In Belgium. 

Au Bon Vieux Temps

Impasse Saint-Nicolas 4,
1000 Bruxelles


Carlbergs and Heineken are probably the best commercialy sold beer.

Asian beer??? You've got to be joking me.