Heineken’s biggest-ever price rises fail to stop decline in profit

Heineken’s biggest-ever price rises in the UK failed to stop its profit being slashed during its latest financial year as it battled “economic volatility”.

According to recently-filed results, Heineken UK’s pre-tax profit was cut from £165m to £106m in 2023 while its revenue increased from £2.3bn to £2.4bn. The Edinburgh-based division raised its prices in 2023 as it faced “significant inflationary pressure on input costs”, reducing consumer spending, higher labour costs and rising energy bills.

The division also makes and sells brands such as Birra Moretti, Desperados, Foster’s, Amstel, Inch’s, Old Mout and Strongbow as well as Beavertown. At the end of 2023, Heineken’s Star Pubs estate totalled 2,382 locations, down from 2,394.

A statement signed off by the board said, “Economic volatility continued into 2023 leading to significant inflationary pressure on input costs. Reduced consumer spending and increased labour costs, as well as high energy bills affecting production and UK retail. continue to provide headwinds.

“To protest margins the group delivered its largest-ever price increases to date, contributing to the off-trade share decline. The group also increased focus on managing our cost base to drive productivity efficiencies and deliver cost savings across the business.”

Meanwhile, Heineken UK's Birra Moretti has overtaken Carling to become the best-selling draught lager in the UK. The company stated that premiumisation is driving this trend.

It was reported that Heineken Silver and Strongbow Ultra have disappeared from shelves in the UK, a little over two years after launching, due to its poor performance. The two brand extensions were launched by Heineken UK in early 2022, but poor sales have reported to have led the major multiples to delist them.

Heineken UK however, denied the claims, saying that Heineken UK has an unrivalled portfolio for both breadth and choice.