Heineken Plans to Raise Beer Prices Amid Inflation Woes

Due to the impact of inflation, Heineken, the world’s second largest brewer, has warned that the price of its drinks may rise.

Soaring ingredient and energy prices were cited by the company, which distributes brands such as Strongbow cider, Amstel, and Europe’s best-selling lager, Heineken.

It comes after Cobra’s founder announced that the company’s pricing will climb due to “vicious” cost constraints.

Neither company has stated how much their prices will rise.

“These kinds of price rises and inflation, I think we haven’t seen in a generation,” Heineken CEO Dolf van den Brink remarked.

He went on to say that raising pricing may lead to “softer beer consumption” if people cut down on their spending owing to rising living costs.

Inflation in the United Kingdom reached a new 30-year high in January, as energy, gasoline, and food expenses increased. The cost of living is now growing faster than salaries, with an increase of more than 7% projected this year.

Unilever, the creator of Marmite, Greggs, and Pret a Manger, a sandwich business, have all warned of price hikes as their expenses grow.

Heineken’s input costs are expected to grow by the mid-teens percentage due to barley prices tripling from a year ago and aluminium prices rising by roughly 50%.

The company’s transportation and energy expenditures have also increased.

It follows a successful year for the Dutch brewer, during which customers splurged on booze because to the epidemic.

In 2021, Heineken reported an 11.3 percent growth in net revenues to 21.9 billion euros (£13.4 billion), with sales of its Heineken-branded beer up 17.4 percent.

The brewer’s earnings increased by 80%, but the company warned that the future year would be “uncertain” due to “inflationary concerns.”

Huw Dixon, a Cardiff University economist and a member of the National Institute of Economic and Social Research, questioned the brewer’s choice to raise pricing.

“Heineken’s good sales appear to imply that profit margins aren’t being squeezed,” he told reporters, “even if some costs may be growing.”

“As specialists, we find it difficult to evaluate if Heineken’s greater production costs are fully reflected in higher customer pricing.”

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