Powerplay in the beverage market
Carlsberg will take over production, sales, and distribution of PepsiCo’s portfolio in Denmark, Finland and the three Baltic countries from 1 January 2029 — an agreement that weakens Royal Unibrew and increases Carlsberg’s market share (and power?) in the region.
Carlsberg’s expansion of the Pepsi partnership is presented as a rational consolidation: From 2029, Carlsberg will become PepsiCo’s bottler throughout the Nordic and Baltic regions (Norway and Sweden has been in the fold for 25 years) and the group will thus be responsible for production, sales, and distribution in five new markets.
This is a strategic move that on paper provides economies of scale and cross-selling between beer and soft drinks. But there is also reason to be critical.
First, the agreement might weaken competition in an already concentrated market. When a large player like Carlsberg brings together several global brands under its own distribution, the risk of market power that can increase prices, worsen delivery terms, and shelf space to the determination of retailers and consumers.
This is not just hypothetical; Carlsberg will have a significantly greater bargaining position vis-à-vis chains in the Nordic and Baltic regions from 2029, which is good for Carlsberg, but maybe not for the consumers.
A serious blow to Royal Unibrew
Royal Unibrew is being hit hard. The Pepsi portfolio accounts for around 13 percent of Royal Unibrew’s net sales, and the company will thus lose an important source of income when the contract expires at the turn of 2028/29.
The market reaction was immediate; the share price fell sharply (more than 25%) after the announcement, illustrating how vulnerable smaller players are when global suppliers reshuffle their local partners.
Little to win for consumers
Consumers may initially experience few immediate product changes, but the shift in power could weaken pricing pressure and the pace of innovation in the market over time. This is a reasonable concern based on how consolidation often affects other industries.
Authorities and retailers should monitor this transition closely. An agreement that gives one distributor greater control over both the alcohol and non-alcohol segments deserves the attention of the Competition Authority and clear demands for transparency in supply and pricing agreements.
It remains to be seen how much attention the competition authorities will give to this new agreement. So far, we have not seen any reactions from that side. That is a bit worrying.
Sources: Carlsberg press release, Inside Beer, Bloomberg.