Advertisement
Singapore markets closed
  • Straits Times Index

    3,224.01
    -27.70 (-0.85%)
     
  • S&P 500

    5,248.49
    +44.91 (+0.86%)
     
  • Dow

    39,760.08
    +477.75 (+1.22%)
     
  • Nasdaq

    16,399.52
    +83.82 (+0.51%)
     
  • Bitcoin USD

    70,598.74
    +608.52 (+0.87%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,954.49
    +22.51 (+0.28%)
     
  • Gold

    2,231.00
    +18.30 (+0.83%)
     
  • Crude Oil

    82.10
    +0.75 (+0.92%)
     
  • 10-Yr Bond

    4.1960
    0.0000 (0.00%)
     
  • Nikkei

    40,168.07
    -594.66 (-1.46%)
     
  • Hang Seng

    16,541.42
    +148.58 (+0.91%)
     
  • FTSE Bursa Malaysia

    1,530.60
    -7.82 (-0.51%)
     
  • Jakarta Composite Index

    7,288.81
    -21.28 (-0.29%)
     
  • PSE Index

    6,903.53
    +5.36 (+0.08%)
     

Heineken warns of beer shortage risk as Europe’s gas supply squeezed

Heineken
Heineken

Heineken is preparing to cut beer production at its European manufacturing plants if faced by a severe gas shortage over winter.

The brewery giant behind Amstel and Fosters said there was a growing “availability risk of natural gas” in the region.

Russia has cut supplies of gas to Europe in recent weeks and European Commission President Ursula von der Leyen said last month that Russia was “likely” to cut supplies further in retaliation for sanctions and support for Ukraine in the war. The EU last week agreed plans to voluntarily reduce gas usage by 15pc over winter in preparation for a possible shut down.

ADVERTISEMENT

Heineken chief executive Dolf van den Brink said the brewer would curtail its output in "extreme scenarios" but said he was "moderately confident" that production would continue as normal.

"The recent softening in some commodities is being offset by the unprecedented price levels and availability risk of natural gas, most notably affecting Europe, our biggest region,” he said.

Heineken has been raising its prices and encouraging drinkers towards more upmarket, and high margin, drinks, which has "effectively offset these inflationary pressures," Mr van den Brink said.

The Dutch company has lifted prices on drinks by 8.9pc over the past six months in comparison to the same period last year and Heineken said the price of a pint was likely to rise further in the coming months, as it is forced to pass on escalating costs.

Mr van den Brink added: "Whilst consumer demand in aggregate has been resilient in the first half, there is increasing risk that mounting pressure on consumer purchasing power will affect beer consumption."

Despite the concerns, Heineken's performance beat analyst expectations with revenue up by more than a third to €16.4bn (£14bn) over the six month period. Profits climbed by a fifth to €1.3bn.

Heineken said that it was eyeing "plenty of opportunities" to expand beyond beers in order to meet the changing wants of customers.

The company is in the middle of a huge cost cutting drive that aims to strip €2bn out of the business by next year, with €1.7bn worth of savings expected by the end of 2022.

Shares in the company were flat on Monday at €96.02 on the Euronext Amsterdam stock exchange, valuing the business at about €55bn.