Heineken has warned that the worth of a pint will proceed to rise over the following yr because the Dutch brewer expects to move on higher costs to customers.
The drinks firm, which beat income and revenue estimates within the first six months of the yr, mentioned on Monday that it was promoting extra beers than earlier than the pandemic as customers throughout Europe shrugged off rising prices and returned to bars.
“The high [costs] that we currently see and that we’ve seen over the past half year have not yet found their way into [consumer] prices — this is to come,” Heineken’s chief monetary officer Harold van den Broek informed the Financial Times.
The common worth of a pint of draught lager within the UK was £4.09 in June, a rise of 13p since January, in accordance to the Office for National Statistics.
Brewers have been growing beer prices as the associated fee of aluminium cans, bottles and barley has risen quickly.
Van den Broek mentioned soaring inflation and pure fuel prices in Europe, which have been now 10 instances higher than the typical over the previous decade, have additionally prompted Heineken to elevate prices. The common price of Heineken’s drinks has elevated 8.9 per cent previously six months in contrast with the identical interval a yr in the past.
Its rival Anheuser-Busch InBev, the world’s largest brewer, mentioned in July that rising gross sales volumes and prices had pushed income to develop sooner than income, however added the beer trade had remained “resilient” regardless of inflation.
However, Heineken chief govt and chair Dolf van den Brink mentioned it was not clear how surging inflation would impression future shopper demand. “Nobody knows, to be truthful,” he mentioned. “Right now . . . people are there and spending money but we are not taking that for granted, for sure,” he added.
Rising vitality costs have prompted Heineken to shift away from fuel at its European manufacturing vegetation.
Van den Brink informed the Financial Times he was “moderately confident” that the corporate wouldn’t have to curtail manufacturing within the subsequent few months however didn’t rule out this feature within the occasion of “extreme scenarios”.
Heineken’s revenues rose 37 per cent to €16.4bn within the six months to July, which Van den Brink mentioned was “unprecedented”, in contrast with the lockdown-marred yr earlier than.
Operating revenue jumped a fifth to €2.1bn, driven by “volume recovery, pricing and revenue management actions”. The quantity of drinks bought was up 0.8 per cent in contrast with the pre-pandemic yr of 2019.
Shares in Heineken have been down 1.6 per cent on late Monday morning. Analysts at Jefferies famous that revenues derived from extra premium beers, corresponding to Heineken Silver, had continued to develop and now accounted for almost half of the corporate’s natural progress in beer gross sales.