Price rises put off drinkers as sales fall at brewer Heineken

HEINEKEN has warned that beer sales have suffered after it was forced to raise its prices.

The Dutch brewer, which also owns the Fosters, Amstel, Birra Moretti and John Smith’s brands, said the volume of beer sold in 2023 slumped by 4.7pc compared with a year earlier.

It raised its wholesale prices to pubs by almost 16pc in January 2023, while the price of a 660ml bottle of Heineken lager has risen from £1.79 in 2022 to £2.50 in Tesco.

Heineken said that it had decided to increase prices in order to offset “unprecedented levels of commodity and energy inflation”.

The brewer has been criticised for weakening some of its beers to save money, after it reduced the strength of Fosters from 4pc to 3.7pc ABV (alcohol by volume) last year, saving about 3p of tax per can.

This month it watered down the strength of its John Smith’s ale from 3.6pc to 3.4pc ABV, following a change in how tax on alcoholic drinks is charged in the UK. Under new rules brought in last August, beers that come in below 3.4pc ABV pay a lower rate of tax. The change was touted as a way to address problem drinking.

But it has been blamed for incentivising brewers to reformulate their drinks to give drinkers less for their money.

Other brewers to have done the same include Carlsberg, which reduced the strength of its Danish Pilsner from 3.8pc to 3.4pc last summer.

Sir Tim Martin, the founder and chairman of JD Wetherspoon, has called it a “big mistake”.

He warned it could put brewers’ listings in pubs at risk.

Shares in Heineken closed down 7pc in Amsterdam yesterday, after it posted a 4.9pc rise in revenues.

But the brewer warned that profits for 2024 could come in below analyst expectations because of economic and political turbulence around the world.

Dolf van den Brink, chief executive, said: “Looking to 2024, we remain cautious about the global economic and geo-political outlook.”