Beer giant to hike prices as it fears inflation will drive drinkers away from pints

Heineken delayed publishing guidance over its financial performance for 2023 until later this year. File Picture: iStock

Brewing giant Heineken has warned that it is facing the worst inflation in a decade and that drinkers could cut back on beer as a result.

The Dutch brewer said it would raise its prices in an effort to offset higher costs, including sharp increases across commodity costs, energy and shipping.

The company, which also brews Amstel and Birra Moretti, however, warned price rises "may lead to softer beer consumption" as shoppers face an increased cost of living.

On Wednesday, Heineken delayed publishing guidance over its financial performance for 2023 until later this year as spiralling inflation casts a cloud over its potential outlook.

Heineken reported net revenues increased by 11.3% to €21.9bn in 2021, while its net profit jumped by 80%.

It comes following a new study that has revealed people are worried about the rising costs of everyday living in Ireland.

A Deloitte State of the Consumer Tracker showed up to 80% of people are now worried about the cost of even everyday items, as the surge in inflation takes hold.  This represents a 6% increase on last month's figures, while one in four are concerned about making upcoming payments.

Other findings include:

• An additional 3% of people are also now worried about making upcoming payments.
• The number of those surveyed who think groceries are now more expensive jumped 7% to 67%.
• The number of those who believe restaurant prices are higher — as restrictions were finally removed in full last month — grew by 8% to 48%.
• Only 8% of consumers are not concerned about inflation.

The results of the consumer tracker found financial stress to be the primary driver of global anxiety (47%) with over half (54%) of people in Ireland also putting it top of the rankings.

While consumer spending is up marginally for the fourth wave in a row, more than half (53%) of those surveyed are concerned about the amount of money they have saved.

Housing remains the largest proportion of spending at an average of 22%, which is up 3% on the last wave, while just under half are delaying large purchases.

In terms of retail, there was a 6% increase in those reporting concerns around rising prices of everyday items. This figure now stands at 80% of respondents — compared to a global average of 72%.

Alcohol and tobacco, groceries and restaurants were all perceived to have seen the largest hikes in price this month.

However, despite the growing concerns about the cost of everyday living, there was also a 5% increase in those feeling optimistic that the financial situation will improve within three years.

Hospitality and travel

When looking at travel and hospitality, safety concerns around Covid-19 have dropped, with a major increase in the number of respondents feeling safe staying in a hotel, now standing at 70%.

There are also increases across in those planning to travel in the next three months, with a 14% increase in people planning to take an international flight in the same period.

Meanwhile, the number of those planning to buy a car in the next six months dropped by 2% to 20%. One in four respondents cited high maintenance costs of their vehicle as the reason for this.

The number of those who want a more fuel-efficient vehicle is up 3% to 11%, while just one in 12 have plans to switch an electric car.

Commenting on the latest results, Daniel Murray, partner and head of consumer at Deloitte Ireland said many people were feeling the pinch as costs continue to increase.

“The Government are acting to mitigate some of the impact in the shorter term but given that energy prices are not likely to drop in the foreseeable future — particularly with the unstable geo-political situation between Russia and Ukraine — and that materials costs are increasing in many industries, the impact is being felt across the economy,” he said.

On the positive side, however, he noted that safety concerns related to Covid-19 have significantly receded.

Deloitte’s State of the Consumer Tracker is a monthly survey that tracks Irish consumers’ attitudes towards personal wellbeing, financial concerns, travel and hospitality, transport and retail.

The results are based on a survey of more than 20,000 consumers across 23 countries.