Carlsberg chief to retire as brewer faces volatile year

The attempt to divest Carlsberg’s Russian operations has been one of chief executive Cees ’t Hart’s biggest challenges.

Carlsberg chief executive Cees ’t Hart will retire after eight years as the Danish brewer struggles to extricate itself from Russia and to raise prices enough to offset surging inflation.

Mr Hart, 64, will leave the brewer at the end of the third quarter at the latest, Carlsberg said, adding that the search for a successor has started. The shares fell as much as 4%. 

The Dutch CEO has been in the role since 2015 and the company didn’t name an immediate replacement, suggesting the departure may be happening sooner than expected.

Mr Hart became Carlsberg’s first non-Danish CEO with a mission to restore growth after a period of stagnant earnings. During his tenure, he focused on cutting costs and improving profitability but failed to reignite sales. The company’s shares gained more than 60% under the CEO, outperforming a 44% gain in Heineken and a 47% drop in Anheuser-Busch InBev over the same period.

The Danish brewer said in February that 2023 will be difficult as consumers start to retrench and consume less beer. It issued a wide-ranging profit forecast, predicting that full-year operating profit could rise or fall as much as 5%.

Russian operations

One of Mr Hart’s biggest challenges recently has been trying to divest Carlsberg’s Russian operations, which has attracted criticism from newspapers. The brewer has rebutted claims that it had been opaque regarding efforts to divest the Russian business and about a possible buy-back clause that would allow Carlsberg to return eventually to the market.

Carlsberg, which is the biggest brewer in Russia and employs 8,400 people there, said last March it would exit that country completely due to the war in Ukraine. Consumer goods companies including Philip Morris International have said that their exits from the country have been delayed because of the government’s role in such divestments. Carlsberg said last month its separation process is close to completion and it had identified fewer than 10 potential buyers.

“Staying on board for another half a year will allow me and the team to continue delivering on our challenging plans for 2023 and accomplishing the sale of the Russian business before the summer,” the CEO said in the statement. 

The brewer entered Russia in 2000 and the operations were for years seen as the beermaker’s biggest growth opportunity. The market previously made up almost a third of Carlsberg’s profit, but its share has diminished in recent years. 

• Bloomberg