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Carlsberg expects coronavirus to harm beer sales

May 1, 2016: Nicosia, Cyprus - May 7 2016: Small green bottles of famous Carlsberg beer on ice ready to be served.
A government shut down of pubs, clubs, and restaurants in many Chinese cities to try and contain the virus will hit beer consumption. Photo: Getty

Danish brewer Carlsberg (CARL-B.CO) said on Tuesday that it is expecting the coronavirus outbreak to cause a dip in beer sales in its Asia markets.

“It’s a very sad situation for China and its people, and the virus will affect our business negatively,” Carlsberg CEO Cees ‘t Hart told reporters on a call.

The government has shut down pubs, clubs, and restaurants in many Chinese cities to try and contain the virus, which means a drop in beer consumption in the short term, he said. Hart noted that the company does not expect any long-term issues.

Carlsberg, the world’s third-biggest brewer, will also be extending the shutdown of some of its breweries in China.

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Budweiser-owner Anheuser-Busch InBev (ABI.BR), the world’s largest brewer, has also closed its Wuhan brewery.

READ MORE: Stocks rout stemmed as China injects $71bn into banks

Carlsberg’s Asian sales make up around one-quarter of its overall global sales. The company said today that it expects mid-single-digit operating profit growth in 2020. In 2019, its full-year sales grew by 3.2% to 65.9 billion Danish krone ($9.76 bn), in line with analyst expectations.

Carlsberg shares are up 30% over the past year, and rose by up to 1.7% in Copenhagen early on Tuesday.

Multi-national companies are starting to warn that quarterly sales in their vitally important Chinese market may be negatively affected by the coronavirus outbreak. Companies including Starbucks (SBUX), McDonalds (MCD), H&M (HM-B.ST), and Ikea have now closed many of their stores in China.

British Airways (IAG.L), Lion Air, American Air (AAL), and Lufthansa (LHA.DE) have all suspended flights to mainland China. Lufthansa announced this week that it was extending its flight suspension to Beijing and Shanghai to 28 February — including Lufthansa-owned Austrian and Swiss Airlines flights too.

More than 20,000 cases of infection have been confirmed, mostly in China. The death toll from the virus hit 425 as of Tuesday morning.

READ MORE: Alcohol-free beer and veg sales soar in 'month of moderation'