Bitter year for Heineken as inflation hits profits, beer sales

Dutch brewer Heineken on Wednesday reported a drop in annual profits as beer volumes declined in “challenging market conditions” including high inflation.

The world’s second-biggest brewer after AB InBev said its net profits in 2023 came in at €2.3 billion (£1.96bn), compared to the €2.7bn profit it made the year before.

Beer volume overall dipped by 4.7 per cent, with 60 per cent of that decline driven by sharp falls in Nigeria and Vietnam, the firm said.

“This year, Heineken had to prioritise pricing to offset unprecedented levels of commodity and energy inflation,” the brewer noted.

This inflationary pressure tailed off towards the second half of the year, it said, but predicted that the economic climate would “remain a factor of uncertainty” into 2024.

Higher prices did push up the overall sales figures to €36.3bn, a gain on the previous year’s €35bn.

It forecast future operating profits to be in the “low- to high-single-digit” range, with net profits lower than that due to currency and tax impacts.

Heineken’s half-year report published in July had already given investors a taste of the gloom to come, with net profit slumping 8.6 per cent as the firm hiked prices.

In March, Heineken was forced to apologise over “ambiguity” in its pledge to stop business in Russia after the invasion of Ukraine.

A Dutch investigative website reported in February that although Heineken had stopped selling its namesake beer in Russia, it had launched dozens of new products.

In August, the firm announced the full pull-out from Russia, selling its operations to the Arnest Group, the largest Russian manufacturer of cosmetics, household goods, and metal packaging.