(Bloomberg) -- Carlsberg A/S expects moderate operating profit growth this year as some consumers pull back on drinking beer and it spends more on marketing to focus on faster-growing markets.

The maker of Tuborg and its namesake beer said it expects operating profit to grow between 1% and 5% this year amid a continued “uncertain” environment even as some inflation pressures ease. This is lower than analysts were forecasting.

The company said organic sales grew 9.2% in 2023, with operating profit up 5.2%. The shares rose nearly 3% in early trading in Copenhagen, as sales were slightly higher than analysts were expecting.

Like other major brewers, the Danish company is grappling with high inflation that has forced consumers to rein in spending. But Carlsberg sees pricier beer as key to its growth and expects prices to keep rising as costs remain high and consumers stay cautious.

“You will see premium products are outperforming mainstream products despite a weaker consumer,” Chief Executive Officer Jacob Aarup-Andersen said in an interview with Bloomberg TV. “They may be buying fewer products, but they are buying higher quality and more expensive products.”

The former Goldman Sachs banker, who took over the top job last year, has vowed to spend more on marketing and continue raising prices to offset higher costs and lower volumes as consumers drink less premium beer or switch to cheaper brands.

Sales in Asia haven’t recovered as strongly as expected coming out of the pandemic, with consumers remaining cautious amid persistent inflation.

“The Chinese consumer is not in a great place,” Aarup-Andersen said on a call with reporters. 

The brewer is also challenged with making up for the income lost from its former operations in Russia, called Baltika, that were seized by the government last year after Carlsberg said it had struck a deal to sell the business.

Carlsberg reported an annual net loss for 2023 of 40.78 billion Danish kroner ($5.9 billion) because of Russia and currency losses.

The lower profit outlook for 2024 is a result of higher marketing costs and is a “necessary evil” to hit longer-term sales targets, said Duncan Fox, consumer-goods analyst at Bloomberg Intelligence.

The financial results come after the company raised its long-term growth targets, citing faster growth in Asia and rising demand for premium and no-alcohol beer driving the gains.

Carlsberg is the first of the major European brewers including Heineken N/V and Anheuser-Busch InBev SA to report annual results this month. 

--With assistance from Dasha Afanasieva, Anna Edwards, Guy Johnson and Kriti Gupta.

(Updates throughout)

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