Irish

Thursday 21 August 2014

Heineken ups market share but criticises lack of supports for pub sector

Philip Blenkinsop

Published 13/02/2014 | 02:30

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Heineken

Heineken said its Irish division, which includes brands such as Coors Light, Tiger and Desperados, now brews 46pc of all lager drunk in Ireland while Heineken beer accounts for one in three pints drunk in Irish pubs.

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Heineken posted a small increase in market share here as the market itself shrank. Lager has 65pc of the €42.5bn strong Irish beer market with stout continuing to decline and now accounting for 29pc of the sector.

"The beer market in 2013 recorded a decline of 3.2pc on 2012 levels," the Irish unit said. "This is an extremely significant decline. Whilst there seems to be a return to growth, though somewhat minimal in the on trade, the outlook for the beer market in Ireland remains fragile.

The Dutch brewer slammed the Government here, saying the credit famine would continue to make problems for the pub sector in 2014. "Heineken Ireland sees no evidence of any serious efforts being made by both government and the banking sector to support the labour intensive pub sector in this regard," the company added.

In Amsterdam, the parent company forecast a return to revenue growth this year with higher beer sales in Africa, Asia and Latin America after a slowdown in several emerging markets in 2013.

The brewer said revenue grew by just 0.1pc last year as price rises failed to offset a sharp decline in overall volumes. For 2014, Heineken said revenue should grow on a like-for-like basis and excluding currency translation effects.

Growth and cost cuts should help its operating margin improve, it said. Heineken expects its latest three-year savings plan, TCM2, to hit its €625m target this year.

Heineken shares were among the strongest performers in the FTSEurofirst 300 index of European stock, rising as much as 3.2pc to €48.615, the highest level in almost four weeks.

"There was no growth last year, so some growth in the next is better. I'd describe it as mildly optimistic after what has been a very weak year in 2013," said Trevor Stirling, beverage analyst at Bernstein Research.

Europe's largest beer seller has a greater share of the sluggish western European market than rivals, but has boosted its emerging market presence by expansion into Mexico in 2010 and the buy-out of its joint venture partner in Asia in 2012.

Heineken warned in October that it expected net profit before one-offs to fall by a low single digit percentage last year. In fact, it fell by 2pc on a like-for-like basis to €1.59bn.

Heineken said volumes had improved in western Europe, in Africa and the Middle East in the second half, with a pick-up in large markets of Nigeria, Republic of Congo and the Democratic Republic of Congo in the fourth quarter.

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