Heineken blames bad weather for beer sales slump

BarcelonaBeer has a surefire ally in the summer: heat. However, this year’s temperatures aren’t helping one of the world’s biggest brewers grow beer sales as much as it would like. Heineken blamed the weather for disappointing second-quarter revenue, which was also hurt by a reduction in its stake in a Chinese brewer. As explained Financial TimesThe Dutch group saw its shares fall 7%, while beer sales in the first half rose 3.1%, below the 3.4% rise analysts had expected. Even the increase in alcohol consumption during the euro was not enough.

“Normally, major sporting events such as the European Championship have a positive impact, but temperatures were well below long-term averages and lower than last year, which affected our business,” said Heineken CEO Dolf van den Brink. In fact, the weaker second quarter overshadowed what had been a good start to the year for the brewing group, reversing a period of declining sales. In addition, the company has also faced criticism for raising prices too much in 2023 and with consumers increasingly unhappy with inflation.

In the first half of the year, Heineken’s revenues rose by 2.2% to €17.8 billion, and operating profit was better than expected, up 12.5% ​​to €2,000 million. Beer sales volumes in Europe rose by 0.6% in the first half compared to an expected increase of 2%, with Northern and Western Europe being the most affected geographic regions. In the Americas, billings rose slightly by 1.1% compared to the 3.1% growth analysts had expected, supported by growth in Brazil and Mexico, but with fewer shipments to wholesalers in the United States.

Demand in China is down

Separately, the brewer also reported an €874 million impairment of its investment in China’s largest brewer, after slowing consumer demand pushed the share price of China Resources Beer below what Heineken paid for its stake. The Dutch group owns 20% of the Asian producer, which saw its shares fall sharply, “possibly reflecting concerns about the macroeconomic environment in China and its impact on consumer demand.”