Heineken plans to raise beer prices as ingredient, energy costs surge

(Image: Reuters)

Heineken NV said it plans to raise beer prices where possible next year to offset surging costs for raw materials and energy, particularly in Europe.

The world’s second-largest brewer expects a jump in input costs “in the high-teens per hectolitre” next year, along with “significantly higher energy costs, particularly in Europe,” according to a statement late Wednesday.

Heineken said it plans to raise prices “responsibly as per local market conditions” to cover most of the increase in producer prices. Still, operating profit is likely to trail net revenue next year, the company said.

Brewers have managed to largely protect margins this year by raising prices to cope with soaring costs. But there’s a limit to how much customers may be able to handle as rampant inflation and higher food and energy costs destroy discretionary purchasing power.

The Dutch brewer said it expects stable to modestly growing volumes next year, with increases in developing markets and declines in Europe. Gross savings will probably come in ahead of its €2 billion target, helped in part by “an increased ambition of savings in Europe.”