The recovering Russian market is a boost for Carlsberg, but there are still question marks over the brewer’s input costs for next year, according to an analyst.

The Danish brewer announced yesterday (7 November) that its nine-month net profits and sales had edged up, helped by an increasing market share in Russia.

Analysts Nomura said Carlsberg’s growth in market share was evidence its efforts in Russia are “starting to pay off”. It said that part of this gain is down to Holsten sales, with the “remainder owing to stronger execution including roll-out of value management tools, product launches and revitalisation of existing brands”.

It also flagged a more “normalised” regulatory environment in Russia. “With respect to beer taxes, duty rises for both beer and vodka through 2014 have been announced and provide some certainty,” Nomura said. It added that as the gap between the price per unit of vodka and beer is likely to close over the medium term, this could be a “positive catalyst” to beer market growth.

However, the analysts warned that input costs going forward could offer a negative for the brewer. “We believe that the company is well hedged on input costs for North West Europe and Asia, however there is still some uncertainty for East Europe,” Nomura said. “We believe that overall input costs will increase mid-single digit in FY13, similar to the FY12 increase.”