Heineken set to raise beer prices for consumers as production costs surge

Driven by a loosening of coronavirus restrictions, particularly in Europe, Heineken's beer volumes rose over the last three months. Credit: AP

Heineken is due to raise beer prices for consumers as it expects significant increases in production costs.

Earlier this year, the world's second largest brewer, which also makes Birra Moretti and Amstel, saw soaring costs due to commodity inflation and rising supply chain costs.

On Wednesday, the Dutch brewer said it will look to raise prices further as it warned of tough conditions ahead.

Dolf van den Brink, chairman of the company, said: “Looking ahead, we see more macro-economic uncertainty and expect significant additional inflationary headwinds putting further pressure on our cost base.

“We will take additional actions including pricing to manage these challenges whilst we continue to invest in superior, balanced growth and sustainable value creation.”

Despite the uncertain outlook, Heineken sold more beer than expected over the past three months as drinkers returned to pubs and bars following the removal of Covid restrictions.

The group said net revenues jumped by 24.9% to 5.7 billion euros (£4.7 billion) for the three months to March.

The company added that revenues also benefited from a 5.7% increase in volumes.

But, along with other brewers, Heineken has faced financial pressures as Russia's invasion of Ukraine has caused grain costs to spike, alongside steep rises in the cost of fuel and transport.

Last year, Heineken said it would pump £38 million of investment into its UK pub and bar business, in a move set to create 500 jobs.

The Dutch beer giant said the cash injection will benefit around 700 pubs in its Star Pubs & Bars operation by the end of 2021.

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