Heineken's European beer sales fall offset by rise in Africa, Asia

FILE PHOTO: The coronavirus disease (COVID-19) impact on alcohol business, in Bangkok
Philip Blenkinsop
·2 min read

By Philip Blenkinsop

BRUSSELS (Reuters) - Heineken NV, the world's second-largest brewer, fared better than expected at the start of 2021 as increased beer sales in Africa and Asia offset a sharp decline in Europe.

The maker of Europe's top-selling lager Heineken, Tiger and Sol, retained its outlook that the impact of the COVID-19 pandemic was significant and markets should gradually improve in the second half of 2021, depending on vaccine roll-outs.

The Dutch brewer sold 50.3 million hectolitres of beer in the first quarter, unchanged from a year earlier on a like-for-like basis. The average forecast in a company-compiled poll was for a 5% decline

Sales in Africa, the Middle East and Eastern Europe jumped 9.9%, with particularly strong performance in Nigeria and South Africa, growth in the former held back by supply constraints and expansion in the latter despite alcohol bans in January and over the Easter weekend.

Asian sales were 5.4% higher, principally in Southeast Asia and including Vietnam, one of the company's largest markets.

Sales in the region did grow in the first quarter of 2020, although collapsed in March as the coronavirus spread.

In Europe, beer sales fell by 9.7% as lockdowns cut drinking in cafes and restaurants by two-thirds.

Growth in sales from stores has not made up for the shortfall. Brewers have also suffered from the higher cost of packaging in single-use cans, rather than cheaper returnable bottles or kegs.

Net profit in the first quarter was 168 million euros ($202.1 million), nearly 80% higher than a year earlier, but more than 40% lower than the 2019 figure, with European weakness offset by other regions and cost controls helping.

The brewer has launched a three year plan to restore profit margins to pre-pandemic levels, partly through cutting 8,000 jobs.

($1 = 0.8314 euros)

(Reporting by Philip Blenkinsop; Editing by Louise Heavens and Alexander Smith)