It’s bad news for beer drinkers as a leading brewer warned it has been it by the worst inflation in a decade and needs to raise its prices.
Alcohol giant Heineken, which also brews Amstel and Birra Moretti, said the increase is needed to cover higher costs including energy, commodities and shipping.
It added the price hike ‘may lead to softer beer consumption’ as it contributes to the cost of living crisis, which is squeezing families in the UK in many other ways such as through the soaring cost of energy bills.
Inflation in Britain has reached its highest level for nearly three decades, it was revealed yesterday.
The Office for National Statistics said Consumer Prices Index inflation reached 5.5% in January, up from 5.4% in December.
Emma McClarkin, chief executive of the British Beer and Pub Association said: ‘The inflation figures published yesterday by the ONS highlight further steep financial challenges the pub and brewing sector are facing following another devastating winter.
‘Rising inflation coincides with the sector experiencing record levels of debt and facing increased costs across the board from energy through to raw materials, as well as supply chain difficulties.
‘We are urging the Government to heed the calls of our Long Live The Local campaign that seeks to support the sector for the long term by extending the current lower level of VAT, lowering beer duty, and introduce business rates reform that reduces the disproportionate burden paid by pubs to help them recover and fire on the UK economy.’
Heineken yesterday delayed publishing guidance over its financial performance for 2023, indicating spiralling inflation may affect its outlook ahead.
It did however report its net revenues increased by 11.3% to 21.9 billion euros (£13.4 billion) in 2021, while its net profit jumped by 80% to two billion euros (£1.7 billion).
Beer volumes increased by 4.6% over the year, and there was also a 6.2% rise over the final three months as restrictions started to lift across Europe.
Sales of its Heineken-branded beer were particularly strong, increasing by 17.4% against levels from 2020.
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There were strong sales of Birra Moretti in the UK but cider struggled, with the closure of pubs for large parts of the year blamed for this.
Dolf Van Den Brink, chairman and chief executive of Heineken, said: ‘We delivered a strong set of results in 2021 in a challenging and fast-changing environment.
‘Looking ahead, although the speed of recovery remains uncertain and we face significant inflationary challenges, we are encouraged by the strong performance of our business and how the EverGreen strategy is taking shape.
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‘This gives me confidence we are on course to deliver superior and balanced growth to drive sustainable long-term value creation.’
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