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Brussels — Heineken, the world’s second-largest brewer, cut its 2023 profit growth forecast on Monday after an economic slowdown in Vietnam and price hikes squeezed sales volumes, depressing first-half earnings by more than expected.

Shares in the Dutch brewer, whose brands include Amstel and Sol, fell as much as 6.7% to their lowest level since January at €90.40, and were the weakest performer on the FTSE Eurofirst index of leading European blue chips.

Heineken said it expected operating profit growth before one-offs in 2023 to be between zero and a mid-single-digit percentage.

Brewers profited late in 2022 from drinkers’ willingness to pay higher prices, but inflation has since taken its toll.

While some shoppers have sought out cheaper alternatives to branded food and white goods, beer drinkers have remained largely loyal to established brands but consumed less.

For Heineken, the average price of its beers was 12.7% higher than a year earlier.

Anheuser-Busch InBev and Carlsberg will give further insight on global beer drinking trends when they report second-quarter earnings on August 3 and August 16, respectively.


In the first half, Heineken sold 5.6% less beer, with declines in all regions. Over half of the drop was due to Vietnam and Nigeria, with price increases also having an impact.

Despite a jump in revenue, Heineken suffered an 8.8% like-for-like decline in operating profit, compared with an average 4.8% drop forecast in a company-compiled poll.

Heineken — whose namesake brand is Europe’s top-selling beer — said it expected a strong second-half turnaround, helped by lower energy and commodity costs and accelerated savings from productivity improvements. The timing of price hikes would also have an impact.

“We have taken the vast majority of our pricing in the first half. That was deliberate and by design. That of course impacted to some extent the volume performance in the first half, but in the second half we see that effect moderating,” CEO Dolf van den Brink told Reuters.

CFO Harold van den Broek said Heineken saw inflationary pressure easing, but not necessarily lower costs, so did not envisage a reversal of beer price hikes.

Heineken said its results had been affected by an economic slowdown in Vietnam, one of the company’s largest markets, which is facing reduced global demand for its exports.

Beer volumes in the Asia-Pacific region fell by 13.2% with more expensive premium beers down by even more. Operating profit reduced by about a third.

The situation was worsened by an excess of stock built up for the Tet new year festivities in Vietnam in January, but Heineken said this overhang was now largely cleared.

Heineken also expected more stability in Nigeria in the second half, where presidential elections and a switch to new bank notes led to a more than 20% decline of beer sales.

“I think this is as bad as it gets, but it is bad,” said Bernstein beverages analyst Trevor Stirling, adding there should be a clear improvement in the rest of the year.


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