July 12, 2012 / 12:58 PM / 8 years ago

Fresh blow for Brewers as Russia plans advertising ban

COPENHAGEN/MOSCOW, July 12 (Reuters) - Russia is poised to further tighten rules on alcohol advertising, dealing a fresh blow to Carlsberg and other brewers who have invested heavily in one of the world’s fastest-growing markets.

Danish brewer Carlsberg, which earns nearly half its profits from the Russian market, has already seen profits hit by an increase in the country’s beer tax. Carlsberg is the market leader with its best-selling Baltika brand. Other major brewers operating in the country are Anheuser-Busch InBev , SABMiller and Heineken.

The Russian parliament, in its continued drive to curb alcohol abuse in the country, is expected to pass a bill banning alcohol advertising on the Internet from as early as the end of July and in the printed media from January 1. The State Duma passed a draft of the bill on Friday.

“The lower house has passed the bill, so the chance of it going through is very high,” said DNB analyst Rune Dahl. “Overall, this puts pressure on the entire market, not only Carlsberg.”

The big brewers are relying on emerging market growth and price rises to offset tough conditions in mature European markets. However, initial success in Russia has come up against a series of profit-sapping government measures in recent years, including a ban on the sale of beer at outdoor kiosks and on store sales outside daylight hours from 2013.

The bill was passed less than two years after the unexpected trebling of beer excise duties.

In May Carlsberg failed to meet first-quarter profit forecasts but said that it expected the market to return to modest growth this year after a 3 percent decline in 2011.

Carlsberg shares traded down 0.4 percent at 1126 GMT on Thursday, in line with a 0.5 percent fall in the Copenhagen stock exchange’s benchmark index.

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