Heineken UK announces price increase

17-Feb-2022 - Last updated on 17-Feb-2022 at 10:12 GMT

Heineken UK has announced an increase in its prices: company expects to be “significantly impacted by inflation and supply chain pressures” (Credit: Getty/Aleksandar Karanov)

Related tags Heineken uk Beer Finance

Heineken UK has announced an increase in its prices as the company expects to be “significantly impacted by inflation and supply chain pressures” this year, according to the companies 2021 full year results report.

While there has been no confirmation of how much the price increase will be, the report stated Heineken expected a “stable to modest” improvement in operating profit margin before exceptional items and amortisation (BEIA) for 2022.

Also specified was an “input cost per hectolitre (BEIA) increase in the mid-teens” which will be offset through pricing in “absolute terms” with the potential to lead to “softer beer consumption.”

Heineken UK managing director David Flochel said: “Without a doubt, 2021 was another tough year for our customers.

“We always aim to be a collaborative partner, and over the course of the pandemic, we’ve provided practical support and guidance to help our customers manage through the crisis, while also investing significantly in improving the resilience of our supply chain.

Pubs hit hard

“Pubs, in particular, have been hit hard by restrictions, which is why we have also invested more than £64m in rent concessions for our Star Bubs & Bars licensees, enabling them to open in full when curbs eased.”

Despite the operator describing the upcoming year as “uncertain”, the companies profit margin grew by 80% in 2021.

Flochel added: “We’ve delivered a good performance in the UK despite the challenges the industry has faced throughout 2021.

“Growth has been driven by our premium beer brands, especially Birra Moretti, which became the UK’s number one premium beer brand by value in the on-trade, and Heineken, which benefitted from great activations around UEFA Euro 2020.

“We successfully launched Inch’s Cider, a refreshing new apple cider brand from Herefordshire built on local provenance and sustainability, and I was delighted and proud it recently received Product of the Year 2022 award within the alcohol category.”

Unprecedented volatility

Heineken stated its net revenues increased by 11.3%, reaching 21.9bn Euros (£13.4bn) in 2021, with sales of Heineken-branded beer up by 17.4%.

This comes after inflation hit an all-time high in January due to an increase in energy prices, food, and fuel with the cost of living set to continue rising faster than wages, potentially exceeding 7% this year.

Flochel said: “I want to thank everyone in our business who have demonstrated huge resilience and adaptability when faced with unprecedented volatility and uncertainty.

“Our teams rose to the challenges, and I’m both proud and grateful to all our Heineken UK colleagues for their considerable contributions in 2021.

“I also want to thank our customers, suppliers and business partners for their support and trust through this difficult period.”