Danish brewer Carlsberg yesterday beat forecasts with a 23 per cent rise in profits, driven by growth at its Russia-based BBH venture which is at the centre of its battle to take over Scottish & Newcastle.
The value of Baltic Beverages Holding, operating in the fast-growing beer markets of the former Soviet Union and jointly owned by Carlsberg and S&N, is crucial to both parties in the bid battle as each is attempting to buy the other out.
Both brewers are constrained by what they can say about BBH as S&N has accused Carlsberg of breaching the BBH agreement, and S&N finance director Ian McHoul hopes arbitrators will confirm a breach and Carlsberg will have to offer its BBH shares to S&N.
"There is a clear conflict of interest regarding the information put out on BBH between us and Carlsberg," Mr McHoul told a briefing after both Carlsberg and BBH announced results.
BBH raised its expectations for the Russian beer market to grow 13-15 per cent this year from a previous 11-13 per cent, but Mr McHoul said the agreement prevented him for talking about next year other than to say its medium term outlook was to look for annual Russian beer market volumes to grow three to five per cent.
The BBH agreement is confidential and drafted under Swedish law, and last week S&N started arbitration which could take months. The Copenhagen-based group said it was still hoping to start talks with the board of S&N after Carlsberg and Heineken launched a £6.8 billion cash bid two week ago which Britain's biggest brewer rejected.