Heineken has reported better than expected profits after putting up the amount it charges for its drinks by an average of 8.9% and has warned prices will continue to rise in the year ahead.
The Dutch brewer, whose eponymous beer is Europe’s bestselling lager, recorded a 37% year-on-year jump in revenue to €16.4bn (£13.7bn) in the six months to July.
It said that despite the rising prices it was selling more beer than before the pandemic, and it also benefited from customers switching to more expensive products.
Thanks to favourable trading conditions as consumers flocked back to bars and restaurants, the volume of drinks sold was up 0.8% compared with the same period in 2019. Operating profits rose by 20.6% to €2.1bn, surpassing analyst expectations.
Birra Morretti and Tiger were two of the company’s higher-end lines that proved more popular with drinkers. Its other brands include Amstel, Sol and Strongbow. Heineken reported double-digit growth in sales of its low-alcohol and no-alcohol beer in 20 countries.
However, the company sounded a note of caution and dropped its target of a 17% operating profit rise for 2023 owing to concerns over pressure on consumer spending and price rises.
The chair, Dolf van den Brink, said: “Our business performed well in the first half of 2022. We grew ahead of the industry in more than half of our markets and the Heineken brand again showed strong momentum, boosted by stepped-up brand support.”
But he said the economic outlook was uncertain “for consumers and businesses alike”. The company said the price of a pint would continue to rise over the next year as increasing costs are passed on to consumers.
Matt Britzman, an equity analyst at Hargreaves Lansdown, said: “Beers remain as much of a staple as ever, with demand showing little sign of slowing despite mounting pressures on disposable income. Sales and profit jumped at the half-year mark as consumers drank more beer at higher prices.”
Heineken is the latest in a line of companies to hail improved sales after putting up the price of well-known brands in the face of higher energy, staffing and commodities prices.
On Thursday Nestlé said it had raised prices by 6.5% in the first six months of the year, while on Wednesday Kraft Heinz, the ketchup and baked beans group, and Reckitt Benckiser, the maker of Dettol, Nurofen and Strepsils, revealed they had pushed through double-digit price increases this spring.
Earlier last week Unilever, the owner of brands including Marmite, Ben & Jerry’s and Magnum ice-cream, said it had raised prices by 11.2% in recent months and expected further increases throughout the year.
