Heineken profits up but may hike prices again

Dutch brewer Heineken reported on Wednesday a jump in first-quarter profit and sales but hinted that it may hike prices again due to the rising cost of commodities.

The world’s second biggest beer company after AB Inbev was buoyed by Europeans and Asians returning to bars and restaurants, as well as higher prices.

Net profit for the first three months of 2022 stood at €417 million (£347m), more than double the figure from the same period in 2021.

The number, however, does not include the 400-million-euro hit expected from Heineken’s decision to exit Russia following the invasion of Ukraine, with the company saying it will provide an update when it releases its half-year results.

Turnover rose by 36 per cent at nearly €7 billion while beer sales rose by 5.2 per cent by volume, with higher increases in Europe as Covid restrictions were eased.

Countries worldwide have faced soaring inflation, with prices of energy, cereals and grains rising further since Russia invaded Ukraine on February 24.

Heineken, which employs 1,800 people in Russia, said last month that it would sell its business in the country as it was “no longer sustainable nor viable in the current environment”.

Hundreds of Western firms have closed shops and offices in Russia since the conflict started and sanctions were imposed on the country.

“The war in Ukraine has brought additional uncertainty to the global economic outlook and commodity market,” Heineken said in Wednesday’s quarterly statement.

The company said it “expects mounting inflationary pressures to impact household disposable income and a consequent risk to beer consumption later in the year”.

It added that “further cost pressures are emerging from rising input costs, supply chain challenges, and from the decision to leave Russia”, and will consequently “take additional actions”.