Heineken shares fall most in three years, as Brazil eats into margins
London — Heineken’s attempt to challenge Anheuser-Busch InBev in Brazil is squeezing the Dutch brewer’s profit margin. The world’s second-largest brewer on Monday forecast a drop in profitability this year as it expands more quickly than expected in Latin America’s biggest economy, where its beer business is less profitable than elsewhere. The shares fell as much as 5.6% in Amsterdam, the most in almost three years. Heineken became Brazil’s second-biggest brewer last year when it bought Kirin’s business there for about 2.2-billion real ($590m). The Japanese company had stumbled amid competition with industry giant AB InBev, and now Heineken is stepping up the fight with increased marketing, causing a decline in its overall profitability even as it sells more beer. "We weren’t expecting these products to accelerate so fast in the first year," chief financial officer Laurence Debroux said. The company’s roster of brands in Brazil now includes Schincariol in the mass-market segment as ...
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