Heineken’s net profits fell by nearly 9% to €1.16 billion during H1 of 2023, while beer sales were down 5.6% year-on-year.
The results were announced after Heineken raised prices earlier in the year in order to combat input and energy cost inflation.
In Europe, beer sales saw a 4.8% reduction compared to the same period last year, with volume of its flagship lager down 6.6%.
Dolf Van Den Brink, chairman of the executive Heineken board, said: “We prioritised and delivered the front-loaded pricing required to offset unprecedented input and energy cost inflation. In Europe, the region with the highest inflationary impact, volume declined in line with our expectations.
“In the second half, we expect pricing to moderate with volume trends gradually improving to a low-single-digit decline.”
Heineken has a “wobble”
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, explained that price rises helped the brewer offset falling sales in order to prevent profits from decreasing further.
“Heineken’s had a wobble in the first half with a big miss versus market expectations, causing the shares to stumble in early trading,” Chiekrie said.
“The group owns high-end favourites such as Heineken, Birra Moretti, Beavertown and many more. There’s been a slight shift in the mix of beers sold towards these more premium products, indicating that pub-goers drinking these pricey brands are proving more resilient to inflationary pressures. Encouragingly, non-alcoholic offerings continued to show strong momentum too. Health-conscious consumers continued the flagship Heineken 0.0 brand, which grew by double digits in key markets.
“But bumper revenues didn’t make their way down to the bottom line as inflationary pressures and increased marketing spending took their toll. That’s led the full-year profit outlook to be tempered down to mid-single-digit growth. Where things move from here will depend on how well consumers can stomach further price hikes for their favourite beer brands.”
In other news, low calorie alcoholic drinks manufacturer DrinkWell has raised £600k in investment as it seeks to expand.