The brewery recently announced its FY2025 full-year financial results, reporting an overall -4.9% year-on-year drop in revenue to RM2.3bn (US$) despite a respectable 11.4% year-on-year growth in net profit to RM375.6m (US$).
The drop in revenue was largely due to a decline in Singapore which saw a -10.2% drop in sales year-on-year to RM560.4m (US$) compared to a -3.0% decline in Malaysia sales to RM1.7bn (US$).
Carlsberg Malaysia Managing Director has attributed the lower revenue to unfavourable Chinese New Year (CNY) timing in 2025, as well as subdued consumer sentiment across both markets.
“Amid the economic uncertainty as well as evolving consumption behaviour across our markets, we remain committed to staying agile and responsive to market dynamics and competition in both Malaysia and Singapore,” he told us at the brewery’s most recent investors conference announcing the results.
“Carlsberg is also mindful of the impact of the excise duty implemented [in Malaysia] since November 2025, and remain focused on improving our bottom-line to support long-term sustainability.”
Clini was referring to the 10% increase in excise duty enforced on alcoholic beverages in Malaysia last year, announced by Prime Minister Anwar Ibrahim as part of the country’s Budget 2026.
Together with Heineken Malaysia, Carlsberg Malaysia had previously called upon the government to recognise the beer industry’s contribution to Malaysia’s GDP as well as to not increase taxation – but to no avail.
RHB Research analysts have estimated the added costs resulting from this added tax to translate into price hikes of 4% to 5% for consumers.
Carlsberg took a hit in sales across its entire portfolio, reporting a -4% drop in sales of mainstream Carlsberg beers, a -7% decline in sales of premium products such as Connor’s stout, Kronenbourg 1664 beers and Somersby ciders, and a -47% drop in alcohol-free brews such as Carlsberg 0.0.
“Amid all of this, our Japanese premium beer Sapporo has continued to perform well, showing double-digit volume growth in both Malaysia and Singapore,” Clini added.
“We also expect the upcoming Visit Malaysia 2026 campaign to support tourism activity and help stimulate domestic spending, which may, in turn, have a positive impact on consumer demand for Carlsberg products.”
Uncertainty still rife
As a leader in the beer sector, Carlsberg has been facing many excise-related challenges for years as Malaysia’s excise rate on beer is the second highest in the world – according to the Confederation of Malaysian Brewers Berhad (CMBB) comprising both Carlsberg and Heineken, this stands at RM1.75 (US$) per degree of alcohol which is even higher than that of premium hard liquor which is RM1.50 (US$) per degree of alcohol.
This year however is one of the most challenging yet, with many factors combining to test the brewery: Lower consumer purchases due to more cautious spending resulting from the overall current state of the economy, as well as the increased taxation forcing price hikes that will further impede consumer desire to spend, and geopolitical pressures affecting the overall market.
“We need to remain cautious this year, amid the continued ongoing macroeconomic uncertainties, external challenges and subdued consumer sentiment,” Clini said.
“What we will continue to do is exercise vigilance in all of our cost optimisation efforts, and continue to support investments in all our brands, the brewery and our digital transformation.”
In order to ensure its business remains sustainable, Carlsberg has allocated RM77m (US$) in CAPEX over a two-year period to upgrade its operational system to be powered by Microsoft Dynamics 265, a system that has been named Smart Core.
“This will ensure that Carlsberg has a future-ready Enterprise Resource Planning (ERP) system in place,” he said.
“We estimate that the completion of Smart Core will be finalised by Q3 this year.”
