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Heineken has cut its outlook for profit growth this year following a sharp slowdown in Asia and as US and European consumers balk at paying more for their beer.
The world’s second-largest brewer on Monday reported a 22 per cent decline in operating profits in the first half of the year, with its overall volumes dropping 5.6 per cent, a steeper fall than the 3.4 per cent analysts had forecast.
The Dutch company blamed the “cumulative effect” of price rises and a “challenging economic backdrop” for a subdued first-half performance that was marked by a particularly weak showing in Vietnam, where Heineken is the largest brewer.
Like its rivals, Heineken has steadily lifted prices in an effort to offset its own rising costs. However, chief executive Dolf van den Brink said he expected price increases to ease in the second half of the year.
The Heineken chief said demand in Asia-Pacific, the company’s most profitable region, was “considerably softer than foreseen due to an economic slowdown and our own underperformance in Vietnam”.
Following the weak first half, Heineken said operating profit growth for the full year would be stable to mid-single digits, down from a previous prediction of mid- to high single digits.
Shares in Heineken fell 5 per cent on Monday, erasing some of their advance this year.
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