Heineken records significant drop in volume sales, blames Nigeria and Vietnam
By Ralph Tathagata
Heineken, the world’s second largest brewer, has recorded a significant drop in volume sales of its beer, as the Dutch brewer’s stocks fell by 6.5% last week.
Heineken attributed much of the decline to the disappointing performance in Nigeria and Vietnam, with both regions accounting for more than 60% of the volume drop in 2023.
In a statement, Heineken said it expected its operating profits throughout the year to see a “low to high single digit increase”.
Heineken chairman and chief executive, Dolf van den Brink, said, “We feel good about where the company is going, but we continue to do that in a turbulent world so that’s why we have deliberately chosen a relatively wide range.”
He added that raising the prices of Heineken beers last year had undoubtedly “impacted volumes”, which fell by 4.7% (more than the estimated 4.4% decline) in 2023. van den Brink, however, didn’t rule out further price increases in 2024.
Instead, he hinted that the pace of price increases will be moderate this year, but pointed out that input costs are still rising.
Heineken raised its beer prices by double digits in the first half of 2023, and again, by single digits, in the second half. The hikes saw Heineken’s average prices increase by 10.2% worldwide.
van den Brink also said, “Strong pricing to offset very high input and energy cost inflation and volatile macro-economic conditions in some key markets affected our volume momentum.”
New tax laws in Brazil (Heineken’s second biggest market) are also likely to impact the company’s bottom line in the coming years, as Heineken will see its global tax rate jump from 26.8% to 29% in 2025.
Analysts called the full year forecast underwhelming as Heineken’s stocks slid in the wake of the announcement.
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