Carlsberg: Britvic deal ‘unrelated’ to losing San Miguel licence

Carlsberg’s £3.3bn bid to buy Britvic is “completely unrelated” to losing the rights to brew and sell San Miguel in the UK, according to group CEO Jacob Aarup-Andersen.

Speaking to investors after the Danish brewer revealed it had reached an agreement in principle with Britvic’s board to acquire the soft drinks maker, Aarup-Andersen said Carlsberg would look to offset the loss of San Miguel to AB InBev by growing its portfolio of world beers including 1664 Biere, Brooklyn Pilsner and Poretti.

“We’re not doing this acquisition because of the loss of MSM (Mahou San Miguel) in the UK,” he said.

Aarup-Andersen said San Miguel accounted for 1.8 million hectolitres of volume and €1.4bn in revenue for Carlsberg in the UK.

He admitted the loss of the brand – worth £272m in off-trade sales last year [NIQ 52 we 24 April 2024] – would hit revenues for Carlsberg Marston’s Brewing Company (CMBC) in the short term, but insisted Carlsberg was “not doing this acquisition” to compensate.

“It will have a negative impact standalone, of course,” he said. “But we will replace that over time through our brands and the world beer category. We have some strong brands that are growing well in the UK in Brooklyn, Poretti and 1664.

“There’ll be a short-term impact and we will mitigate it over time,” he added.

Asked if the £100m in cost savings Carlsberg had identified from the acquisition of Britvic could be eaten into by “dis-synergies” from losing San Miguel, Aarup-Andersen said: “We don’t see it as a dis-synergy because MSM is completely unrelated to this.

“It’s just an impact on the business that we will deal with like when other brands enter or leave the portfolio. It’s just this time it is a bigger brand than your average brand is, there’s no doubt about that.”

Elsewhere, Aarup-Andersen denied Carlsberg was reducing its exposure to beer, despite the fact the proposed acquisition of Britvic would make soft drinks the biggest part of its UK business, and account for 30% of total volumes at group level.

Alongside the Britvic announcement, Carlsberg revealed it is to acquire Marston’s remaining 40% stake in CMBC, and Aarup-Andersen insisted the brewer remained open to growing its brewing presence through M&A in the future.

“This is a major deal for us and we’ll be focused on getting the integration right and delivering value for ourselves,” he said. “Of course, if a value accretive situation occurs within beer in the next couple of years we will look at it.

“We all know from history that they are far and few between, but this is not a case of us reorientating away from beer. Beer is our core.”