Beer sales crashed at brewing giant Heineken (HEIA.AS) last month, as the shutdown of bars and restaurants around the world hit the drinks industry.
Heineken said on Wednesday 22 April that its volume of beer sold fell by 2.1% in the first quarter of 2020. The slump worsened throughout the period, with volumes in March down 14%.
As well as its name sake beer, Heineken makes beers like Amstel, Sol, Lagunitas, and Birra Moretti, as well as ciders including Strongbow, Old Mount, and Bulmers.
First quarter profits fell 68% to €94m (£83m) as a result of the sliding sales. Chief executive and chairman Jean-François van Boxmeer blamed the global COVID-19 pandemic.
“By now, most countries where we operate have reacted by taking far-reaching containment measures such as restrictions of movement for populations and outlet closures, sometimes combined with the mandatory lockdown of production facilities,” he said in a statement.
“Our performance for the first quarter reflects the initial impact of those measures, and volumes in March were obviously heavily affected.”
Heineken said falling sales were expected to continue and in fact worsen in the second quarter of the year.
The company pulled its financial guidance for the year, warning it couldn’t accurately predict how it would perform given the coronavirus pandemic.
Heineken said it was suspending all discretionary spending and capital expenditure. Bonuses for managers and the board have also been suspended and Heineken said it would not pay an interim dividend in August. Top management are also taking a 20% pay cut.
“In the past few weeks we have taken necessary measures to reduce our costs, secure additional financing and adapt to the fast changes we see in our markets,” van Boxmeer said.
He said Heineken had “strong brands and a strong balance sheet” to weather the crisis.
Separately on Wednesday, upmarket mixer brand Fevertree (FEVR.L) said it would likely take a hit from the pandemic lockdown. Fevertree, which makes tonic water and other mixers for alcoholic drinks, said 45% of its sales come from bars and restaurants.
“Clearly the scale and impact of COVID-19 has posed some significant challenges across our regions,” Fevertree cofounder and chief executive Tim Warrillow said in a statement.
Warrillow said it was “too early to quantify COVID-19’s full impact” but said Fevertree was “well positioned to manage our way through this situation.”