Heineken reports profits boost

Dutch multinational brewer Heineken experienced a surge in profits over the past year, driven by cost-cutting strategies and increased consumer prices.

The company reported that yearly net profit rose from €209 million in 2008 to €1.02 billion last year, with revenue sales edging up from €14.32bn in 2008 to €14.7bn.

Although overall global beer volume consumption fell by almost 5%, price increases across the portfolio provided leverage for the performance of the company.

However, forecast figures predict a further fall in beer consumption for 2010 and, to exacerbate the problem, beer drinkers are expected to turn to cheaper brands, which Heineken will look to compensate for by maximising its advertising opportunities.

The brewer said plans have been made to increase marketing spend across several main brands of its product portfolio in order to maintain grounds for its premium pricing positioning.

Growing value share will become a priority as Heineken continues to invest in the growth of its brands.

Furthermore, the acquisition of Scottish & Newcastle in mid-2008 will allow for lower purchasing prices, cost synergising and further cost-cutting in 2010.

Natalie Verduystert, 24.02.2010