Carlsberg to shed UK jobs

Danish brewer Carlsberg said yesterday it would restructure its operations in Britain to meet increased competition in the beer market with the loss of around 60 British jobs by the end of this year.

Carlsberg also said it had raised its forecasts for 2005 net profit to 1.1 billion Danish crowns ($174.3 million) from the previous forecast of 1.0 billion following the sale of some real estate in Denmark. The company said it has another building site, valued around three billion crowns by experts, to sell.

It said the 60 jobs, out of a UK workforce of 2,500, will be shed from support functions such as sales administration and finance as it looked to cut costs in a competitive UK market and cope with rising inflationary costs from higher energy prices.

Its two UK breweries at Northampton and Leeds in central and northern England will be unaffected.

Costs for the UK restructuring were estimated at around 90 million crowns after tax to be taken in 2005, the company said.

"We are on the offensive to respond to market developments. Consumers are, for us, going in a negative direction, moving from beer to spirits and wine," Carlsberg spokesman Jens Peter Skaarup said.

The restructuring will cut away 70 jobs, 10 of which are already vacant, so 60 people would be affected, Mr Skaarup said.

Carlsberg shares closed up 2.8 per cent at 336.50 crowns, while the Copenhagen blue-chip OMXC20 index ended 0.3 per cent ahead. "The UK restructuring is good news, it is the last area in western Europe to be cleaned up," HSH Gudme analyst Michael Rasmussen said, adding that the overhaul will raise Carlsberg's earnings before interest and tax at least 40 million crowns.

Carlsberg has suffered as the smallest of four national brewers in a sluggish UK beer market against its three bigger competitors Scottish & Newcastle, InBev and Molson Coors Brewing Co.

Carlsberg said it had sold premises in Hellerup, north of Copenhagen, with an accounting gain of around 250 million crowns and 190 million crowns after tax.

The sale, part of the company's strategy to bring its property activities to a close and focus on its core brewing business, reduced net debt by around one billion crowns, it said.

Mr Skaarup said the brewer still has a site with a floor area of 150,000 square metres left in Hellerup, one of the most expensive areas in Denmark.

"My estimate is that Carlsberg can get three billion crowns for that ground," said real estate agent Peter Norvig.

Mr Skaarup declined to comment on the value of the site.

"The sale of the premises was expected and is a step in the right direction. It is good timing; when Carlsberg published nine-month earnings earlier this month, some people were worried about the debt levels. Now Carlsberg reduces debt by 1.0 billion," HSH Gudme analyst Rasmussen said.