Danish brewer Carlsberg has announced that its annual profits may witness a slump as a result of decreasing consumption in eastern Europe.
Consumption in both the countries has dropped due to sanctions and new drinking laws announced by the Russian Government to control alcoholism.
According to the company, beer volumes in Russia declined by between 6% and 7% in the second quarter due to the uncertain macroenvironment and weak economic development.
Carlsberg CEO Jrgen Buhl Rasmussen said: "Unfortunately, we believe the eastern European beer markets will be impacted further as consumers are facing increased challenges and this will impact the group's profits negatively this year."
The company is anticipated to record low to mid single-digit percentage decline in reported operating profits, when compared to an earlier forecast of low growth.
Russia reclassified beer as an alcoholic drink and banned its advertising. Sales of beer have been restricted in street kiosks.
