‘No risk’ of loss: Carlsberg Malaysia plays down impact of Asahi partnership ending

By Pearly Neo

- Last updated on GMT

Carlsberg Malaysia has stressed that the end of its exclusive distribution partnership with Asahi is risk-free and it will forge on with its premiumisation strategy. ©Asahi
Carlsberg Malaysia has stressed that the end of its exclusive distribution partnership with Asahi is risk-free and it will forge on with its premiumisation strategy. ©Asahi

Related tags Carlsberg Malaysia Singapore

Carlsberg Malaysia believes the end of its exclusive distribution partnership with Asahi is risk-free, and will use the opportunity to double down on its premiumisation strategy.

Carlsberg has held the sole exclusive distribution rights to the Asahi brand in Malaysia for over 10 years, but both brands announced earlier this year that they had mutually agreed not to renew this agreement starting 2024.

“Carlsberg will only be distributing Asahi Super Dry beer until December 31 2023 – we have had a great run, and it is an amicable parting, [but] starting January 1 2024 Asahi will be a competitor and we will treat them respectfully just like we treat every other partner,”​ Carlsberg Malaysia Managing Director Stefano Clini said in response to queries from FoodNavigator-Asia​.

“We believe that there is no risk at all to not continuing this partnership in Malaysia [nor] any material financial impact to the company for the year ending December 31 2023.

“This does not mean that we are stepping back from premiumisation at all, in fact we will continue to drive our premiumisation strategy​ and will take this opportunity to switch to even more new premium products to come.

“I am not able to reveal exactly what these new brands or products will be just yet, but can definitely say that the end of this current partnership may not sound right, but is an opportunity be even more right for us in the long run.”

That said, this does not mean that the industry should be anticipating any major acquisitions by Carlsberg Malaysia in the near future to replace Asahi, as the focus will be to remain on stability and organic growth.

“I cannot speak for Carlsberg as a whole international entity, but as a registered company Carlsberg Malaysia is not looking at any big acquisitions just yet,”​ Clini added.

“The focus for now is very much on organic growth, so we believe there is no need to make major changes to the strategy when it is working well.”

Carlsberg Malaysia’s premium portfolio currently comprises of the 1664 Kronenbourg range, Somersby cider range, Connor’s Stout Porter, Danish Royal Stout, several Brooklyn Lager craft products and Asahi Super Dry.

It is expected that more partnerships with premium beer or cider brands based in other markets are likely to be announced in the coming year.

Marketing focus

The crisp, dry mouthfeel that Asahi Super Dry is well-known for has long been considered a major consumer draw into the premium beer sector for Carlsberg Malaysia, which would then be sustained by keeping consumer experience at the forefront of its marketing efforts.

Along these line, Clini said that initiatives prioritising consumer experience will continue to be a key marketing focus for the company, despite marketing expenses having been on the rise over the past year.

“The thing is to invest responsibly – For beer more than any other FMCG category, it is of the utmost importance to create a good, memorable consumer experience so that is what we try to prioritise,”​ he said.

“With the market indicators showing that consumer perception and brand health status of the premium brands is still going strong, we will certainly continue investing in this area – right now consumer sentiment is not yet as high as it can potentially be, but what we definitely do not want is to pull back to profit short term but then not be actively in the game when purchasing power and interest spokes once again.”

The firm’s investment in marketing campaigns and events to create these consumer experiences over the past six months alone have ranged widely to cover themes such as Chinese New Year, East Malaysia tattoo art appreciation, a Liverpool football players meet-and-greet, St Patrick’s Day, and collaborations with movie cinemas and audio tech firm Marshall Willen.

“Overall profitability may be somewhat lower compared to the high base last year, but it is still higher than it was during the COVID-19 pandemic despite consumers having more focus on essential needs during this difficult economy, so we remain positive”​ he concluded.

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