COPENHAGEN Carlsberg gave a gloomy outlook for the Chinese market where beer drinkers are increasingly opting out of the most expensive brands, prompting its shares to hit their lowest level since March 2022.

"There's no doubt that the Chinese market is tough. It declined 5% in the first half of the year, and we don't see that improving in the second half," CEO Jacob Aarup-Andersen said on a call with journalists.

The company, which generates around one-fifth of its sales in China, said volumes grew 3% in that market in the first six months of the year. Carlsberg has 26 breweries and is the fourth-largest beer company in China with a 9% market share.

"We're still performing solidly in China. But within premium we're seeing high-end premium consumers migrating down to more affordable premium brands," he said.

"Bigger stock levels across the industry and weak consumer sentiment means that we are cautious going into the second half," he added.

Carlsberg's shares were trading 3.9% lower at 0937 GMT to their lowest level since March 15, 2022. Shares have fallen 18% since June 21 when it announced an offer for a takeover of British soft drinks maker Britvic.

Carlsberg lifted its full-year operating profit growth outlook late on Tuesday, despite reporting weaker-than-expected sales for the second quarter which was hit by poor weather in Europe.

"We have seen a clear bounce back in Western Europe after a very weak June," Aarup-Andersen said.

He expects volumes in Western Europe to be flat in 2024 after declining 1.7% in the first six months of the year.

Carlsberg, the maker of brands such as Kronenbourg 1664, Tuborg and Somersby, is the world's third-largest brewer behind Anheuser-Busch Inbev and Heineken.

  - Reuters