KUALA LUMPUR (April 10): Carlsberg Brewery Malaysia Bhd does not intend to raise prices any further for the rest of this year, following a 6.2% price hike from this month due to rising costs.

Speaking to reporters at a press conference after its 49th annual general meeting here today, its managing director Lars Lehmann explained that raw material prices for malt and barley in particular have been fully hedged for the next 12 months.

“We are now in this situation that we have hedged all our needs for malt and barley for the rest of 2019,” he added.

Nonetheless, he said any uncertainty in the market, such as US-China trade war, and new taxes from the Government, may then force the company to raise their product prices.

Lehmann also highlighted that the price increase from this month will preserve the brewery’s margins amid higher costs.

Factors pushing up overall costs include higher malt prices that have risen by 15% to 20% this year due to poor barley harvests in Europe and Australia caused by bad weather and drought.

Meanwhile, prices of glass bottles have increased by 4% this year, while utilities costs rose 6.6% in July last year.

“We are mindful of the impact of any price adjustment and have kept this [at] a minimum to ensure our products remain affordable and competitive in the marketplace,” said Lehmann.

Apart from the ongoing contraband beer issue, one of the challenges Carlsberg that Lehmann highlighted is the smoking ban in eateries, noting that it is impacting beer consumption there.

Over in Singapore, he expected stiffer competition in terms of prices within the market with the ratification of the European Union-Singapore Free Trade Agreement that is expected to take effect in the fourth quarter of this year.

Under the agreement, beer coming from the EU into Singapore is not subject to import tax any longer, as is beer brewed in Singapore going into the European economic bloc.

Nonetheless, he does not expect the stronger competition in Singapore to have a “huge impact” and said it will “not completely change the momentum of the business there”.

Additionally, Lehmann hinted at the brewery introducing new non-alcoholic beverages to increase its revenue stream, but declined to elaborate.

At 5pm, shares of Carlsberg closed 8 sen or 3% lower at RM26.96, giving it a market capitalisation of RM8.29 billion.