Carlsberg A/S (CARLA), the Nordic region's biggest brewer, said its French unit will cut 214 jobs by the end of 2010 and reintroduce the Kronenbourg and 1664 brands to help restore profitability and increase sales.
The workforce reductions at Brasseries Kronenbourg will span ``all locations, all functions and all levels,'' the Danish company said today in a statement. The unit, which became part of Carlsberg as a result of April's takeover of Scottish & Newcastle Plc, currently employs about 1,400 people.
The French beer market has been declining for two years because of a slowing economy and restrictive legislation, Carlsberg said. The S&N purchase made the company market leader in the country, where volume sales of beer slid 2.9 percent in 2007. The French unit is losing market share, it said.
``They have spent the last couple of months getting to know the French organization and now they are acting,'' Jens Thomsen, an analyst at Jyske Bank in Silkeborg, Denmark said by phone today. ``It definitely makes sense and I am pretty confident that they can turn the French operations around.''
Carlsberg dropped as much as 13 percent to 190 kroner in Copenhagen trading as European stocks fell for a third day. The shares traded at 193 kroner as of 12:08 p.m. local time.
``Our strategic plan will help us increase the sales, win back market shares, stay competitive and restore the profitability,'' Brasseries Kronenbourg's Chief Executive Officer Thomas Amstutz, who took over last month, said in the statement.
The Kronenbourg brands are ``interesting'' and the company ``could make them profitable in other markets as well,'' Jyske Bank's Thomsen said.
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