Heineken to raise prices even further in 2023

Dutch brewery group Heineken is counting on new – even higher – price increases this year. The group says that especially in Europe, margins are under enormous pressure – even though its financial year 2022 ended with a whopping 31 % profit growth.

Prices continue to rise

The Dutch group has had better sales last year than in pre-pandemic 2019, selling 257 million hectolitres of beer last year, almost 7 % more than in 2021. Turnover rose to 34.6 billion euros, a 19 % growth excluding acquisitions. Price increases could not stop consumers in Asia in particular, while consumers are also increasingly choosing premium brands.

Adjusted net profit actually rose 31 % to 2.8 billion euros, but that is including a 88 million-euro write-off of the Russian operations, a withdrawal that is expected to cost the brewer 400 million in total. Both Heineken and Carlsberg are still hanging on to breweries in Russia, even though they stopped selling in the country. Both brewers would prefer to sell that infrastructure in the first half of this year.

Costs to rise considerably

Heineken’s analysis is almost literally the same as with Carlsberg’s earlier this month: prices will continue to rise for the time being, which may lead to Europeans in particular drinking less beer. Heineken expects costs (especially ingredients and energy) to rise by a further 16 to 19 % per hectolitre during the year. As the beer producer buys its raw materials and energy a year in advance, the company will only really feel the energy prices of 2022 this year, CFO Harold van den Broek warns.

CEO Dolf van den Brink would prefer to pass on those costs completely to consumers, Dutch newspaper AD reports, but in Europe that will not fully be possible. On that market, margins are “incredibly under pressure”. Overall volume may be stable or slightly higher in 2023, the brewer concludes.