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Markets

Carlsberg reduces profit outlook for remainder of 2011

The globe's fourth largest beermaker by volume reduced this year's projected profits on account of challenges in Russia including sharply reduced demand, beer tax increases and stricter laws, according to published reports.

After investing as much as $12 billion in Russia since the 1990s, Carlsberg has captured roughly 40 percent of beer sales in the nation, The Financial Times reports . But Chief Executive Officer Jorgen Buhl Rasmussen said the market is underperforming.

"We are clearly not pleased with our second quarter performance," he told Dow Jones Newswires. "We are not seeing a weakening consumer sentiment in Russia. In fact Russian consumers' spend into the beer category has increased, but since prices are so much higher, our volumes have been hit."

CNBC reports increases in prices for consumers and inclement weather in Russia are partially attributable for the reduction.

Russia boosted beer taxes last year as part of an effort to confront alcoholism, which The Financial Times reports has negatively impacted beer sales.

Efforts to minimize alcohol consumption in Russia also include beer sales restricted from sidewalk kiosks. Advertising alcohol on television, radio and outdoor mediums will be banned next summer.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.