Energy costs, inflation could sap beer sales, Heineken says

LONDON, April 23 (Reuters) – The world’s No. 2 ‌brewer Heineken said on Thursday energy costs and inflation – driven up by the war in Iran – could hit demand for its beers, though its first-quarter revenue and volumes beat forecasts.

Sustained cost-of-living pressures, shifts in drinking habits and U.S. tariffs ​already meant the maker of Tiger and Sol as well as its namesake lager, ​expected a difficult year.

Now, the conflict that began with U.S. and Israeli airstrikes ⁠at the end of February has increased the cost of energy needed for production and further ​dented consumer spending power.

Heineken’s shares fell by almost 3% in early trade. Analysts said its warning ​on beer demand, a poorer-than-anticipated performance in the Americas, home to major beer markets Mexico and Brazil, and the absence of any update on the search for a new CEO were all negatives.

Heineken is searching for a ​CEO after Dolf van den Brink unexpectedly resigned in January. Its results statement made no mention ​of its efforts to replace him.

The company, which is the biggest brewer after ‌Anheuser-Busch ⁠InBev reported a 2.8% rise in first-quarter organic net revenue, ahead of analyst expectations for a 2.3% rise. Total volumes, which analysts had forecast to be flat, were up 1.2% organically.

Strong performance in Asia Pacific helped to offset declines in beer sales in Europe and the Americas, where beer ​demand has been sapped ​by factors such as ⁠bad weather and U.S. immigration policies that have hit workers sending remittances home.

Heineken said it lagged the market in Mexico during the period and ​was hit by a shorter carnival season in Brazil.

“Global trade has become ​more complex ⁠and volatile, with impacts on energy availability and costs in certain markets. This leads to inflationary pressures, which might affect consumer sentiment in the medium-term,” van den Brink said, without mentioning the Middle Eastern ⁠conflict directly.

The ​report is the last he will present before he ​steps down on May 31. Heineken said in January it had initiated a search to appoint his successor.