Heineken warns of further price hikes

21-Apr-2022 - Last updated on 21-Apr-2022 at 10:08 GMT

Figures released: Heineken announced its most recent trading update (image: Getty/LauriPatterson)

Global brewer Heineken is considering increasing its prices as a result of inflationary pressures and “macro-economic uncertainty”.

The company announced a price rise earlier this year (February) in its 2021 full year results report.

The latest warning came as the brewer announced its Q1 2022 trading update, which revealed total beer volume grew in the UK, driven by the on-trade recovery.

Reported net profit for the first three months of 2022 was €417m (compared to €168m in 2021) for the global business.

It stated the net profit growth was driven by the top-line growth, with the partial recovery of the on-trade in Europe as the main factor.

Trading results

Revenue for the first quarter of 2022 was €6,989m (compared to €5,145m in 2021) and beer volume grew 5.2% organically against last year and 2.8% ahead of 2019, on an organic basis.

Specifically for Europe, net revenue grew by more than two fifths (46.1%) organically with total consolidated volume up 16.9%.

Beer volume also increased organically by just over a tenth (11.5%) with on-trade volume almost tripling relative to last year but remained behind 2019 in the high teens.

Executive board chairman and CEO Dolf van den Brink said: “We had a solid start to the year in line with our expectations, especially benefiting from strong channel mix from the partial on-trade recovery of Europe and assertive pricing across all regions.

“We continue to make progress on EverGreen and launched Heineken Silver in Europe to drive premiumisation at scale.

“Looking ahead, we see more macro-economic uncertainty and expect significant inflationary headwinds putting further pressure on our cost base.

“We will take additional actions including pricing to manage these challenges while we continue to invest in superior, balanced growth and sustainable value creation.”

Beer launch

The brewer launched Heineken Silver earlier this month (April), which is aimed at a younger demographic.

The 4% ABV brew was made available to the on-trade on draught and in 330ml bottles from 4 April.

The launch was backed by a £20m marketing spend, which is understood to be the biggest promotional investment Heineken has made, and includes TV advertising, social media promotion, in-outlet visibility, mass sampling and exposure at major sporting events.

Heineken is aiming to get the product into thousands of pubs over the course of 2022 from when it is launched in the on-trade next month.