Heineken Malaysia to hike prices

> Increase will take effect from Sept 7, but sum expected to be below previous figures when GST was in place, says finance director

PETALING JAYA: Heineken Malaysia Bhd, which saw lower earnings for the six months ended June 30 from a year ago, has confirmed that a price increase to its products will take effect on Sept 17 in line with the implementation of the sales and service tax (SST).

Finance director Szilard Voros ( pix) said the quantum of increase will be announced then, but noted that the price levels are expected to be below the previous prices when the 6% goods and services tax (GST) was in place.

“We don’t expect SST to have a big impact but it will still open up the gap compared with contraband, so this is something we need to be careful about and we will continue to monitor,” he told reporters at a media and analyst briefing yesterday after announcing its financial results.

Citing the last price increase was in April 15, he said there is a need to pass on the cost to consumers in view of rising cost of business, including input cost, packaging materials as well as a weaker ringgit.

“It’s in our interest to minimise the consumer price increase impact driven by the SST,” Voros added.

Heineken’s net profit for the second quarter ended June 30 fell 11% to RM54.9 million from RM61.58 million a year ago mainly due to higher advertising and promotional expenses.

Revenue rose 6.4% to RM421.57 million compared with RM396.27 million in the previous corresponding on the back of the execution of the month long football campaign and increase in sales volume as a result of trade loading in early April 2018 prior to the price adjustment on April 15.

For the six months period, its net profit fell 6.2% to RM103.66 million from RM110.55 million a year ago, dragged by higher commercial spending for the festive period in Q1 and the football campaign in Q2.

Meanwhile, its revenue strengthened 8.4% to RM855.38 million from RM788.87 million.