Heineken warns about higher beer prices due to inflation

Beer brewer Heineken thinks it will feel the pressure of inflation this year. The prices of raw materials, transport, and energy have been high for some time, and the brewer will have to pass these on to the customers, the company said with the presentation of its annual figures. The company warned that beer becoming more expensive may mean that Heineken sells less of it.

Heineken managed to cover the consequences of higher raw material prices with longer-term contracts in the past period. Now that grain remains expensive, the brewer will also have to pay those higher prices. The cost per hectoliter of beer will be around 15 percent higher, the company warned.

The catering industry in the Netherlands previously reported that it would raise prices. Heineken said it is difficult to predict what this will mean for sales. "We think that people really want to have a drink with friends again," said CEO Dolf van den Brink. "And it also plays a role that many people want to support the catering industry after the corona time."

The coronavirus still plays a role. Heineken believes that the markets in Asia and Oceania will bounce back strongly this year. The recovery of the catering industry in Europe may take a little longer. Last year, Heineken already showed a recovery compared to the first corona year 2020. In terms of volume, for example, Heineken sold 4.6 percent more beer. The company also noticed that customers are increasingly opting for slightly more expensive beers. The volume of the Heineken brand grew by 17.4 percent and is now higher than before corona.

Other premium brands also scored well. The Italian Birra Moretti, for example, was successfully introduced to new markets. Asian beer brand Tiger faced problems, suffering from lockdowns in Vietnam and Cambodia.

The 0.0 trend also continues. Heineken sold 10 percent more non-alcoholic beer and now also makes non-alcoholic variants for more different types of beer. 0.0 now accounts for 6.6 percent of all beer Heineken makes. Heineken is also growing outside the beer market with cider, for example. Although the company was troubled b English pubs that were closed for a good part of last year regarding the apple drink. Heineken is also investing in hard seltzer, a type of alcoholic lemonade, which it markets under different names in several countries.

All this resulted in a turnover of 26.6 billion euros. Below the line, Heineken had a profit of 3.3 billion euros.