Heineken Malaysia to closely monitor price increases

by ANIS HAZIM / pic by TMR FILE 

HEINEKEN Malaysia Bhd said it will continue to monitor its beer prices to offset the increasing prices for raw materials and packaging materials.

Its finance director Karsten Folkerts said that this year, the group will be focusing on input costs development as they have already increased some of its beer prices by 5% to 7% in 2021.

“What we will do in 2022 is to basically review if we need to increase our prices — that is something that we always continuously monitor and where we see if we need to do it in terms of our margins of our products,” Folkerts said during Heineken Malaysia’s financial year 2021 (FY21 ) earnings results media and analyst briefing yesterday.

Meanwhile, he noted that the group is trying to mitigate the price increase by working very closely with Heineken NV’s global procurement partners to ensure continuous supply and best prices for its products.

The world’s second-largest brewer’s net profit for the fourth quarter ended Dec 31, 2021 (4QFY21), increased to RM95.85 million from RM54.17 million a year ago due to higher sales volume, driven by the easing of Covid-19 restrictions and earlier festive sell-in for Chinese New Year 2022.

The group’s bourse filing also showed that its revenue went up to RM692.34 million from RM519 million in 2020. While its earnings per share (EPS) rose to 3.92 sen from 3.6 sen.

The group also proposed a single tier dividend of 66 sen for FY21 to be paid on July 28, subject to the approval of shareholders at the forthcoming AGM.

This brought its total dividend for the year to 81 sen.

Heineken Malaysia MD Roland Bala said that the group will continue to navigate the challenging external environment by adapting to the new market reality.

“We will ensure the safety of our people, keeping a tight rein on costs and staying focused on our strategy to accelerate our business recovery.”

Bala also welcomes the stance taken by the government not to increase excise duties on beers and stouts in its Budget 2022, as any hike in excise rates will further fuel illicit alcohol demand.

“As it is, Malaysia’s excise rate for beers and stouts ranks second-highest in the world. Illegal trade and smuggling have caused the government to incur huge tax revenue losses, disrupted legitimate businesses and risked exposing consumers to cheaper and unregulated illicit alcohol,” he added.

Nonetheless, he said that Heineken Malaysia remains committed to support the government to stamp out illicit trade.

Heineken Malaysia’s share price closed 1.39% or 28 sen higher yesterday to RM20.36, valuing the group at RM6.15 billion.