Heineken sold less beer in the UK during the summer as it raised prices by more than 7% and cool rainy weather put a dampener on barbecues and outdoor celebrations.
The drop, at the company which also owns Amstel, Birra Moretti and Tiger as well as its namesake brand, reflected an 7.6% fall in the amount of beer sold across Europe, with the average price of beer sold up 12%, driven by inflation and higher sales of premium beers.
Worldwide, sales volumes dipped 4.2% as prices rose 9.5%, leading to a 2% rise in sales to €9.6bn (£8.4bn) for the third quarter of the year.
Dolf van den Brink, Heineken’s chief executive, blamed “the impact of adverse weather in July and August”. He said sales trends improved in September and the company gained share in sales via pubs and restaurants in most of its markets but had “more to do to recover” in retail sales. He added that price inflation was easing but there had been a “slowdown of consumer demand” as some markets faced “challenging macroeconomic conditions”.
Steve Clayton, the head of equity funds at the broker Hargreaves Lansdown, said the figures were a “response to endless weeks of cloud and drizzle” but despite the weather, Heineken had done better than expected.
“Overall, Heineken believe they have held or gained market share in over half of their markets, even when volumes have proven hard to grow,” he said. “The group are sticking with their full-year expectations; Heineken expect to deliver stable to mid-single-digit growth in operating profit in 2023, despite the challenging environment.”
The results came as Reckitt Benckiser, the maker of Dettol, Nurofen and Durex, also revealed that the amount of items it had sold declined while it put up prices – in its case, by 7.5%.
The company said sales of its baby milk products had been disappointing after the company benefited from rivals’ supply problems in the US last year. However Kris Licht, the chief executive, said Reckitt was “on track to deliver our full-year targets”.
The company announced a £1bn share buyback programme – a way to reward investors – as it said it was generating significant spare cash. However, analysts at Jefferies noted that the company had scaled back ambitions to increase profit margins to about 20% by 2025.
Heineken and Reckitt’s performance is further evidence that households are being careful about the amount they spend on their weekly shop as inflation affects the price of basics from butter to rice.
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The volumes of items sold in supermarkets in the UK have fallen back even as their sales figures look artificially healthy as a result of price inflation.
Inflation has begun to ease but the latest figures show that it is proving stickier than anticipated, remaining at an annual rate of 6.7% as a combination of increased labour and energy costs continues to feed through to basic household goods while extreme weather events linked to the climate crisis affect harvests around the world.
