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Rouble's Turn To Rubble Bad For Drinks Industry

Published on Dec 22 2014 1:32 PM in Drinks

Rouble's Turn To Rubble Bad For Drinks Industry

The rouble's meltdown may lead to double-digit downgrades for a number of the world's most prominent drinks companies, as importation costs steadily increase.

According to Citigroup, drinks companies are the most susceptible to the currency's instability outside the world of finance: over 30 per cent of sales for both Carlsberg and Coca-Cola Hellenic, the second-largest bottler of the soft drink in the world, come from Russia.

Though the Danish lager-maker says it will continue trading there, it recently insinuated that a one-rouble turn against the euro could have a DKr100m (£10 million) effect on forecast operating profits.

The implosion in value of the Russian currency could thus reduce Carlsberg’s full-year results by as much as a third, according to Andrew Holland, drinks analyst at Société Générale.

The French food and drinks firm Danone is Russia’s largest dairy producer, and it relies on the country for 11 per cent of its sales. It downplayed the impact the hellish and erratic condition of the rouble would have its costs by stating it trades in Russia "very much at a local level with local brands."

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