Heineken sees sales drop after beer price hikes

BREWING giant Heineken has cuts its earnings guidance after consumer demand was hit by price increases. The Dutch brewer, which also makes Fosters and Amstel, said it made “significant price increases” at the start of the year in an effort to offset “unprecedented levels of commodity and energy inflation”.

In the UK, the Office for National Statistics (ONS) said beer prices were 10.2 per cent higher in June than a year earlier.

The brewer yesterday said the volume of beer it sold over the first half of 2023 was down 5.6 per cent year-on-year.

It told shareholders it saw a sharper 7.6 per cent drop over the second quarter as a result of the “cumulative effect of pricing actions” and tough economic condi- tions on its customers.

As a result, the firm reduced its predicted earnings for the year, indicating that it expects growth in operating profit before one-off costs to be between zero and a mid single-digit percentage. It had previously pointed towards growth between a mid and high single-digit percentage.

Meanwhile, the firm reported that total revenues grew by 6.3 per cent to €17.4bn (£14.9bn) over the half-year due to the benefit from higher pricing.

It said it also benefitted from customers continuing to buy more premium brands.

Shares took a hit after the disappointing update, closing down almost seven per cent yesterday.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, cited the firm’s “big miss versus market expectations” for the drop.