Profit Heineken suffers from AB InBev competition

Dutch brewery group Heineken has lowered its financial year’s expectations as its profit suffers from increasing competition with AB InBev. Still, turnover and volume were able to take advantage of the beautiful weather in Europe.

Fierce competition

In this year’s first half Heineken saw its turnover grow by 4.2 % to 10.8 billion euro, while the volume of sold beer rose by 4.5 % to 112.7 million hectolitre. However,operational profit went down 2.9 % to 1.7 billion euro as exchange rates and rising prices for raw materials had a negative influence, as did increased competition with AB InBev on the Brazilian market after Heineken acquired the Kirin beer brand. For the full year, CEO Jean-François van Boxmeer expects operational profit to go down by 20 points, he states in a press release. The markets were not impressed and sent the share prices tumbling.

Volume sold in Europe went down by 0.1 %, but the hot summer weather sent second quarter profit up 0.9 %. In total, the eponymous Heineken brand climbed 7.5 % in volume as the alcohol free Heineken 0.0 is now available in 33 markets. Significant volume growths were also achieved by Tiger, Krušovice and Desperados. Last year, Belgian branch Alken-Maes had already published its results: it too combined volume growth with lower profits as competition with AB InBev and lower margins in export cost the firm dearly.