Carlsberg Group (Denmark)

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"Probably the best beer in the world," is how Carlsberg has memorably described itself in an ad campaign (originally created by Saatchi & Saatchi) that has run more or less continuously since the early 1970s. This world-famous brew is still one of the best-known global beers, produced locally at more than 80 sites in almost 50 countries. Carlsberg became the dominant force in Scandinavian beverages in 2000 following merger with Norwegian competitor Pripps Ringnes. In 2004 it strengthened its hand in Northern Europe with the acquisition of German brewer Holsten for E1bn. In 2007, it launched a joint bid to break up the UK's Scottish & Newcastle in partnership with Heineken. As a result of that deal, and consolidation among other companies, Carlsberg will soon become the world's third largest brewer, although it remains heavily reliant upon Europe, where almost 90% of revenues are generated. The main Carlsberg brand is supported by Tuborg, Holsten, Baltika and Kronenbourg.

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Recent stories from Adbrands Weekly Update:

Adbrands Weekly Update 31st Aug 2017: Following the loss of several global clients in recent years and the impending review of its biggest remaining international client Amazon, IPG's Initiative network secured a huge morale boost with the capture of brewer Carlsberg's global account. The business will transfer from five year incumbent OMD at the beginning of 2018.

Adbrands Weekly Update 19th May 2016: Ads Of The Week: "La Revolution". In just a few weeks, the UEFA Euros football tournament will kick off an extraordinary summer of sport. Here's tournament sponsor Carlsberg's homage to host country France, an entertaining knockabout from 72andSunny Amsterdam, packed with little in-jokes and a few celebrity cameos, like legendary French defender Marcel Desailly. Meanwhile Paul the octopus, a star of the 2008 tournament, predicts Iceland to win. Get those bets in now, suckers.

Adbrands Weekly Update 18th Feb 2016: Carlsberg made a E1bn-plus charge against its operations in Russia, China and the UK to reduce brewing capacity, resulting in a loss of around E345m for the year. The charges include a E500m write-off against goodwill attaching to its lead Russian brand Baltika, sales of which have plunged in the wake of that country's clampdown on alcohol consumption. Excluding special items, operating profits were down by 8% year-on-year. Beer volumes slipped back for the year, but revenues rose to the equivalent of around E8.8bn.

Adbrands Weekly Update 2nd July 2015: Ads of the Week "If Carlsberg Did Haircuts". Yes it's corny; yes, we've seen it all before. But the "Probably The Best [x] in the World" concept is still irresistible, even with the slightly clunkier "If Carlsberg Did..." wording. 72andSunny's Amsterdam office get more firmly to grips with the brief and come up with the best ad in this series so far. If Carlsberg Did Barbers like this, we'd definitely go there.

Adbrands Weekly Update 5th Mar 2015: Carlsberg Group announced the retirement of CEO Jorgen Buhl Rasmussen. He will be succeeded by Cees 't Hart, previously head of Dutch dairy group Royal Friesland Campina.


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Background

Free for all users | see full profile for current activities: Carlsberg was first brewed in 1847 by JC Jacobsen. Born into a family with a long history of brewing ale, the young Jacobsen wanted to try his hand at the sort of bottom-fermented, matured beer traditionally produced in Germany, known as lager. He set up a brewery on a hill outside Copenhagen, which he named after his young son Carl. "Carlsberg" is Danish for "Carl's hill". The beer was an immediate success, and the company expanded rapidly. Carl Jacobsen joined the business in the 1860s, but father and son soon fell out over their respective academic interests. JC's interest lay in the natural sciences, so much so that he used his new wealth to establish the Carlsberg Foundation in 1876 to fund studies in mathematics, philosophy and the humanities, as well as to run the newly completed Museum of National History at Frederiksborg. Carl's interests, on the other hand, lay in the arts, and he wanted to fund activities in this field instead. After a blazing row, Carl left the family firm in 1881 and set up his own competing company, Ny (or New) Carlsberg.

Even after the death of the elder Jacobsen, the two breweries remained rivals for another 25 years. In 1902, Carl retired from brewing and set up his own charitable trust, the New Carlsberg Foundation, dedicated to the arts. In a bid to reconcile himself with his father's memory, he donated his own brewing interests to his father's foundation and the two companies were finally amalgamated after his death. As one of Denmark's biggest companies, Carlsberg had a enormous influence on the culture of the country, particularly in the capital, where the two Carlsberg Foundations bestowed a series of museums, churches and other public buildings, as well as the Tivoli Gardens amusement park. Denmark's most famous tourist attraction, the Little Mermaid statue in Copenhagen, was a gift from Carlsberg to the city in 1913.

Father and son rivalry had not interfered in the growth of the business. The first exports of Carlsberg were to Scotland in 1868, and supply routes were quickly established to the rest of Scandinavia and beyond. The company's fastest growth occurred after the Second World War as Carlsberg became locked in friendly competition with rival Danish brewery Tuborg. This company had been established in the 1870s as an industrial group, but after 1880 devoted its attentions solely to brewing. In 1894, it had merged with a collection of other small companies to form United Breweries. With the international market growing for both companies, Carlsberg and United agreed in 1903 to work in partnership. During the 1950s and 1960s, Tuborg and Carlsberg rapidly developed export markets throughout Europe and Asia, but it quickly became apparent that even friendly competition was getting in the way of business, and the companies agreed to merge formally in 1970 as United Breweries. Although Tuborg became a leading beer throughout Scandinavia, it was Carlsberg which established itself as an truly international brand, and the company reverted to the Carlsberg name in 1987.

Five years later, Carlsberg agreed to merge its brewing and distribution business in the UK into a joint venture with British food and drinks company Allied-Lyons, later Allied Domecq. The resulting business, Carlsberg-Tetley, became the country's third largest brewer, but Allied gradually lost interest in the joint venture as it tried to focus its own broad portfolio. In 1995, Allied Domecq sold its share in Carlsberg-Tetley to #1 brewer Bass. However, that deal was later blocked by the government under anti-competitive legislation. Instead Bass was forced to sell the shares back to Carlsberg in 1997. Also that year, Carlsberg established Coca-Cola Nordic Beverages, a joint venture with Coca-Cola to manufacture and distribute the US company's soft drinks throughout Scandinavia.

The group continued to develop its international coverage with a series of further deals. In 1999, Carlsberg acquired a 20% stake in Korea's biggest brewer Hite, as well as Lithuanian brewery Svyturys, and German beer Gatz. Later the group snapped up Danish drinks business Saltum-Houlbjerg Bryggerier. But it sold its minority stake in Spanish licensee Cruzcampo to Diageo (who in turn sold the whole business to Heineken). Carlsberg later appointed Mahou as its new licensee in Spain. In early 2000, Carlsberg increased its stake in Carlsberg Malaysia, a joint venture with Hap Seng Consolidated, to 50%. The year's most significant deal came in June when the group announced the acquisition of the brewery business of Orkla, one of Norway's biggest consumer goods and chemicals groups. Carlsberg agreed to merge its own brewery arm with that of Orkla's Pripps Ringnes, the largest brewery group in Sweden and Norway, producing beer, soft drinks and mineral water.

A few months after the Pripps deal, Carlsberg announced the friendly takeover of loss-making domestic rival Albani Brewery. However Danish regulators blocked the deal on concerns that the deal would lift Carlsberg's share of the domestic beer and soft drinks market to a virtual monopoly. In 2000, leading Swiss drinks company Feldschlosschen joined the portfolio. Meanwhile the parent company sold off most of its other non-brewing interests, including wine and spirits distributor Vingaarden (to management in two tranches in 1999 and 2002) and the Tivoli Gardens amusement park (to Skandinavisk Tobakskompagni and Augustinus Fabrikker for $40m).

Another series of deals arrived in 2001. Carlsberg acquired controlling stakes in Okocimskie Zaklady Piwowarskie ("Okocim"), a leading Polish brewery, listed on the Warsaw Stock Exchange, and in Turkish brewery Turk Tuborg. At the same time, as a condition of regulatory approval for the Pripps deal, Coca-Cola Nordic Beverages was wound down, with Carlsberg absorbing the company's Danish and Finnish activities (Coca-Cola took control of the bottling in other territories). The company went on to bolster its Polish business with the buy-up of three other local breweries. In 2004, the group paid E1bn to acquire German brewer Holsten. See full profile for current activities


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