Carlsberg is the fourth largest international player in beer and is driving forward with its strategy for ever greater clout globally, says Tim Palmer The Danes are emerging as one of the winners in the battle for control of the global beer market. Its contender, Carlsberg, is the fourth largest international player behind US giant Anheuser-Busch, Dutch brewer Heineken and Interbrew from Belgium. In common with the other major players, the Dane has grown by increasing beer sales in existing markets and through acquisition. It has an active strategy to take a leading role in the global consolidation of the brewing industry. It now has 100 subsidiaries and associated companies which brew and sell Carlsberg and Tuborg, and 90% of its beer sales take place outside Denmark. Last year it joined forces with Orkla, one of Scandinavia's leading brewers. The new Carlsberg business is now owned 60% by Carlsberg and 40% by Orkla. This has led to a restructure of the operation with the focus going on three distinct geographical areas: the Nordic countries, eastern and western Europe, and Asia. Orkla's strengths in the Nordic countries and eastern Europe gives Carlsberg market leadership in Norway, where the Ringnes operation has a 55% volume share. It is also market leader in Sweden through Orkla's Pripps business which controls 33% of the beer market and 19% of the soft drinks and mineral water category. The acquisition also brought with it a joint venture with the Finnish brewer Hartwall. This jv, Baltic Beverage Holdings, owns six Russian breweries and, with 25%, is the Russian market leader. Carlsberg takes a similar approach to selling its beers as the other world brewers. It uses the twin strategy of a major global brand ­ Carlsberg ­ underpinned by a portfolio of strong regional brands including Tuborg and Baltika and local brews such as Tetley's, Pripps. Ringnes, Koff and Karhu. The UK is a valued part of the operation. Marketing director Alex Myers says: "It represents about 25% of our total business and in value terms it is our biggest market. Carlsberg has been there a long time as both premium and mainstream lagers." He adds that although Carlsberg is an established brand in the UK, it has a lot of potential elsewhere. "It is far from mature in most of the world markets and we are trying to get out of our dependence on the mature sectors and ensure the expanding markets of the future, such as eastern Europe and Asia, become more important to our business." But the value of its UK operation is not being neglected. Carlsberg-Tetley chief executive Colin Povey says the company has been heavily investing in the business in the last three years. This includes £40m on its Northampton and Leeds breweries, £20m on a new regional distribution centre and £16m on new warehouses. And the total marketing budget for the C-T brands this year is £40m. Last year it made the most of its sponsorship of Euro 2000 and the England team and saw its sales volume boosted by 124% during the summer. "We leveraged that sponsorship well.We hit a peak and maintained a high level of trading afterwards. "This year we have been getting excellent brand exposure with the success of the Liverpool team, where we have been the shirt sponsor for the last 10 years." This year the Carlsberg brand is supported by £6.5m worth of TV advertising and to make up for the lack of major sporting events it is running a raft of promotional activities across all trade channels. The sustained activity has paid dividends. ACNielsen figures for the 12 months to the end of February show the brand's volume grew 19.1%, while the standard lager category as a whole was up 1.4%. Povey says: "We have been working hard with our leading customers and we have kept investment levels high. But the swing from on to off-trade puts pricing under pressure. "The growth in the off-trade comes from the big players and dealing with them impacts on margins. In the past couple of years there has been price deflation and in recent months this has also been occurring on the on-trade." One of the big issues Povey faces is the trend towards premium products. "We need to differentiate between Carlsberg Lager and the premium Export brand and there is work in progress on that. Carlsberg is one of the few truly international premium beer brands and we want a big share of the UK cake." {{Z SUPPLEMENTS }}