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Heineken warns of rising beer prices

Heineken announced on Wednesday that it will raise beer prices for consumers even further as it expects “significant” increases in its costs.

The second-largest brewery in the world sold more beer than expected in the first quarter, as European drinkers returned to bars with the removal of the Corona restrictions, but it warned of harsh conditions ahead of us.

“We see more macroeconomic uncertainty and look forward to another significant anti-inflationary wind that will put additional pressure on our costs. We will take further action including pricing to address these challenges,” said Dolph van den Brink, CEO.

Van den Brink Warned Earlier this year, cost inflation was “not from the tables”.

Heineken said net revenue per hectolitre rose 18.3 percent during the quarter, driven by “assertive pricing” and consumers moving to more upscale capitals. This is due to an increase of 8.8 percent in the previous six months.

The war in Ukraine, a major grain producer, added to pressure costs for breweries, alongside sharp increases in the costs of other commodities, fuel and transportation. This has raised the price of a pint for drinkers who are already facing sharp increases in the cost of living.

Heineken beer volumes rose 5.2% on a similar basis over the quarter, above the analysts’ consensus of 3.5%. Expectations for the entire year remained unchanged despite inflationary pressures, said Heineken, whose brands include Amstel, Tiger and Morty, as well as Lager in its name.

Trevor Stirling, an analyst at Bernstein, said: “Average prices can grow so much, while volumes are still growing strongly, proving the company’s ability. [and] The sector will go through the necessary pricing to offset the winds against input costs this year and next. “

Net revenue rose 24.9% to 5.8 billion euros, bringing in a net profit for the quarter of 417 million euros, more than double the figure of the previous year. Heineken shares rose 2.8% to € 91.88 in early trading.

Rivals Anheuser-Busch InBev and Carlsberg have yet to report first-quarter results, but Carlsberg said in February it expects to recoup all of this year’s cost increases from consumers.

Heineken also expects a € 400 million charge for impairment when it seeks to get rid of its Russian operations, having decided to withdraw from the country following the invasion of Ukraine.

Heineken warns of rising beer prices Source link Heineken warns of rising beer prices

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