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Heineken sales up as drinkers return to bars but hints at price hike

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·Finance reporter
·2-min read
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Heineken beer being served in a pub
Heineken sales are up more than expected as people return to bars and pubs. Photo:Edgar Su/Reuters

Heineken NV (HEIA.AS), the world’s second-largest brewer, reported higher-than-expected beer sales in the first quarter as customers returned to pubs but has warned of rising beer prices.

The Dutch company said beer volumes rose by 5.2% on a like-for-like basis from the same period last year. Revenues climbed 35% to almost €7bn (£5.82bn/$7.58bn) in the first three months of the year, compared with the same period last year.

Read more: Shoppers resorting to bulk buying amid cost of living crisis

Net revenue rose 24.9% to €5.8bn, resulting in net profit for the quarter of €417m, more than double the figure from a year earlier.

Heineken shares rose 3.2% on the news:

The increase in Europe was 11.5%, driven by a steady loosening of coronavirus restrictions, with Heineken’s beer sales in bars and restaurants there almost tripling.

Growth was mainly driven by Brazil, China, the Netherlands, Spain, Ireland, Italy, the UK, Portugal, Nigeria, and the United Arab Emirates.

The maker of Heineken, Sol and Tiger lagers and Strongbow cider said Russia’s invasion of Ukraine had brought additional uncertainty to the global economic outlook and commodity markets.

Chief executive officer Dolf van den Brink warned of economic uncertainty and “additional inflationary headwinds” in the months ahead and indicated the company may raise prices further.

“Further cost pressures are emerging from rising input costs, supply chain challenges, and from our decision to leave Russia,” the group said.

Read more: UK inflation hits 30-year high of 7% as cost of living crisis deepens

Den Brink said Heineken would continue increasing consumer prices for its beers to recoup expenses.

“We see more macroeconomic uncertainty and expect significant additional inflationary headwinds putting further pressure on our cost base. We will take additional actions including pricing to manage these challenges,” he said..

Heineken has previously said it expects an impairment of €400m following its retreat from Russia amid the war in Ukraine.

The beermaker in February flagged that it was facing the worst inflation in a decade.

Watch: How does inflation affect interest rates?

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