Corona relief increased Heineken’s beer sales in the first three months of the year. At the same time, the company warns that the war in Ukraine will contribute to higher beer prices in the future.
The brewery giant presented its first-quarter sales numbers on Wednesday, which showed solid growth in beer sales.
Heineken also warns that beer prices may now rise.
Going forward, the company expects more macroeconomic uncertainty and more inflationary pressures, according to senior manager Dolph van den Brink.
– We will take further measures, including pricing, to meet these challenges, says Heineken’s president Update.
The brewery group wrote that the war in Ukraine has created more uncertainty about the future of the global economy and commodity markets. According to the update, the increased costs of what the company buys, supply challenges, and the decision to withdraw from Russia are factors that push prices up.
Beer sales soared in Europe
Corona restrictions have been eased and removed in many places since the new year. This has contributed to an increase in beer sales, especially in Europe, the company reports.
Beer sales increased 5.2 percent in the first quarter, compared to the same period last year when the pandemic became more widespread.
In Europe, sales increased by 11.5 percent, and in bars and restaurants on the continent, beer sales almost tripled. In the rest of the world, Heineken has also seen sales growth.
In addition to Heineken, the giant brewery is behind beer brands such as Sol, Amstel, Tiger and Birra Moretti.
The company’s revenue ended at 6.99 billion euros in the first quarter of the year, equivalent to 66.8 billion crowns. This represents an increase of more than 35 percent on a turnover of around 5.15 billion euros compared to the same period last year. The change in income was in line with the company’s expectations.
Fear of price growth will affect beer sales
Heineken stock did well after the update, ending up at more than five percent on the Amsterdam Stock Exchange on Wednesday.
The most important thing to take with you, and the reason the market reacted so positively, is the re-emergence of beer drinking in Europe after the restrictions we saw last year, says analyst Matt Pritzman at Hargreaves Lansdowne. Reuters.
Although the easing led to sales growth at the start of the year, Heineken fears the price hike will have general consequences for the amount of beer people buy in the future.
“We expect increased inflationary pressures to affect household disposable incomes, and give an afterthought to beer consumption later in the year,” the company wrote in the update.
However, Heineken did not adjust its forecast for 2022, which has maintained a “stable to modest” improvement in profit margins this year.
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