Heineken warns that beer prices will rise higher
Beer brewer Heineken has indicated that the price of a beer is set to rise in the near future. Its quarterly report for the start of the year revealed that the company will pass on the costs for more expensive raw materials, such as grain, where possible. In the first three months of 2022, Heineken benefited from higher beer prices, as well as an increase in sales due to people in Europe and Asia returning to pubs.
The price of grain and energy has been rising for some time, but the war in Ukraine has pushed prices up even further. If the war in Ukraine persists, this will also mean less grain will make it to the global market, as the country is a large grain producer.
The price increases already implemented were one of the reasons that Heineken showed a year-on-year turnover increase of more than a third to almost seven billion euros. The company did this by selling five percent more beer. In Europe, the increase in beer sales was higher by more than 15 percent, but that is partly due to the fact that lockdowns were still in force during the first quarter of 2021.
In the Netherlands, the amount of beer sold by Heineken increased by more than 30 percent, and in France and Italy by more than 20 percent. In the United Kingdom, more than 40 percent more beer was sold. However, Heineken suffered from a truck drivers' strike in Spain, causing growth to lag behind other European countries.
In addition to rising beer sales, the growth of somewhat more expensive premium beers, like beer from the Heineken brand, is also continuing. This has not only helped Heineken's turnover, but also their profit. That amounted to 417 million euros, compared to 168 million euros in the first three months of 2021.
The profit does not yet include the writing-off of approximately 400 million euros for the termination of the company’s Russian activities. Heineken will provide more information about this in their figures for the first half of this year.
Reporting by ANP