Be it aluminium, energy, malt or freight: the costs for the production of beer are rising sharply. Heineken is therefore holding out the prospect of higher selling prices and the associated reduction in consumption. The Swiss Brewery Association remains calm.
According to Heineken, the costs of beer production are currently rising in the double-digit percentage range.
Alarm bells are ringing at Heineken. The world’s second largest brewery, which has over 300 brands in its range, is worried about the high inflation and the ongoing supply bottlenecks. The Dutch company is anticipating an increase in input costs this year in the middle between 10 and 20 percent. Be it expenditure on energy, aluminium, malt or freight – the costs relevant to the industry are currently increasing synchronously.
According to Heineken, the higher costs will be offset by the pricing, which could lead to lower beer consumption. To put it more simply: beer is becoming more expensive and some consumers, who have to calculate more rigorously because of inflation, will drink less. How much global consumption could fall remains unclear for Heineken. Because nobody knows what will weigh more heavily: the joy of being able to drink a beer with friends again after two years, or the anger about the higher price.
The price increases will also be noticeable in Switzerland, where Heineken is present with brands such as Calanda, Eichhof, Haldengut and Ittinger. In addition, providers such as the Danish Carlsberg have announced higher prices. The breweries can hardly absorb the rise in costs with their margins alone. This is also not the case because during the pandemic the share of sales in the retail trade, where the pressure on margins is particularly great, increased at the expense of the catering trade, in Switzerland from 61 to 76 percent. Nevertheless, the Swiss Brewery Association is not overly concerned about inflation. The reason: How much beer is drunk in rich Switzerland is primarily a question of the weather – and not the price.