Heineken's Net Profit Reaches EUR975mn In H112



News: Netherlands-based brewery Heineken's net profit reached EUR783mn (US$975mn) in H112, as the brewer seeks to expand its operations in the profitable Asian beer market, reports AFP. The firm's sales increased 4.5% year-on-year (y-o-y) to EUR8.8bn (US$11bn) in H112. Heineken's bottom line was helped by the sale of its minority stake in a Dominican brewer for EUR131mn (US$163.1mn). The firm witnessed a 3.3% y-o-y growth in beer volumes amid tough economic conditions and harsh weather in Europe, said Jean-Francois van Boxmeer, the CEO of Heineken.

BMI View: The Netherlands is one of Europe's top beer exporters. However, around 50% of beer production is still consumed locally, and the domestic market is large. The sector is highly consolidated, with the top four producers - Heineken, Bavaria, Grolsch and InBev - controlling more than 95% of the market. Heineken is the dominant player and controls around 50% of the market, while the three other contenders each control around 15%. Competition between these four leading players is intense. However, all four brewers were found guilty of operating a cartel to fix prices in 2007. InBev was given immunity from prosecution in return for cooperation, but the other three firms were all hit with stiff financial penalties that impacted their profits in 2008.

This article is tagged to:
Sector: Food & Drink
Geography: Netherlands