CEO Morning Brief

Carlsberg and Asahi's 10-year Partnership Ends

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Publish date: Tue, 20 Jun 2023, 08:42 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (June 19): Carlsberg Brewery Malaysia Bhd announced the non-renewal of its distribution agreement with Japan's Asahi Group Holdings Ltd.

In a filing to Bursa Malaysia on Monday (June 19), the brewer said both parties have mutually agreed not to renew the said agreement and the exclusive distribution of the Asahi brand or trademark in Malaysia that will expire on Dec 31, 2023.

“We have had a great run with Asahi Super Dry, and it is an amicable parting after having the sole rights to locally manufacture, sell and distribute the brand for more than 10 years.

“Having said that, the group will remain the exclusive distributor of Asahi for 2023 and we will continue to support the brand for the rest of this year,” said Carlsberg managing director Stefano Clini.

He added that following this development, Carlsberg will continue to drive its “premiumisation” strategy.

“We are in the midst of exploring opportunities to expand our premium portfolio to deliver the best drinking experience to our Malaysian consumers,” Clini added.

The non-renewal of the Asahi agreement is not expected to have any material financial impact on Carlsberg for the year ending Dec 31, 2023 (FY2023).

In December 2011, Carlsberg were awarded the rights to locally manufacture, sell and distribute Asahi’s premium beer - Asahi Super Dry.

Carlsberg and Asahi Group entered into a brewing and distribution licensing agreement on Jan 1, 2019, whereby Carlsberg was granted the exclusive right to brew, produce, distribute, market and sell the brand ‘Asahi’ in Malaysia.

The company’s subsidiaries, Carlsberg Singapore Pte Ltd and Maybev Pte Ltd, also entered into a distribution agreement dated Jan 1, 2019, with Asahi for the exclusive right to import and distribute the brand ‘Asahi’ in Singapore.

Carlsberg's net profit for the first quarter ended March 31, 2023 (1QFY2023) dropped 7.15% to RM85.04 million from RM91.59 million a year ago, due to the early timing and shorter sales period for the Chinese New Year (CNY) celebrations, coupled with higher input costs and marketing expenses.

The brewer's earnings per share fell to 27.81 sen for 1QFY2023 from 29.26 sen in 1QFY2022, its bourse filing showed. Its board of directors announced a first interim dividend of 21 sen per share.

The group's revenue for 1QFY2023 saw an uptick of 0.97% to RM660.2 million from RM653.85 million in 1QFY2022, contributed by price adjustment effects, which offset the impact of lower volume during the quarter due to the earlier CNY festive season, which came in January this year.

Carlsberg closed six sen or 0.29% lower to RM20.46, valuing the brewer at RM6.26 billion.

Source: TheEdge - 20 Jun 2023

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