Heineken’s sales slow in Africa

Perhaps it was a mistake to club Africa, the Middle East and eastern Europe into one unit. All these markets appear to be in trouble. Heineken reported on 1 August 2016 that second-quarter beer volumes dipped 5.9 percent on an organic basis across Africa, the Middle East and eastern Europe, hurt by a weakening environment in Russia and Nigeria, where low oil prices and falling currencies are denting growth.

Heineken’s CEO Jean Francois van Boxmeer told media that he is “praying for higher oil prices” to reinvigorate demand in Africa, the Middle East and Eastern Europe.

Exacerbating the situation is a fall in tourist numbers in Burundi, the Democratic Republic of the Congo and Egypt.

Heineken’s sales of premium-priced beer rose 2.6 percent, the slowest first-half pace in three years.

Heineken’s total beer volumes rose 4.1 percent in the first half. Revenue grew 2 percent to EUR 10 billion (USD 11 billion), while revenue per hl dropped 4.9 percent to EUR 91. Year-on-year net profits in the first half of 2016 fell to EUR 586 million (USD 654 million) from EUR 1.14 billion the previous year, Heineken said. However, the brewer stressed that 2015 results had been inflated by “the exceptional gain of EUR 379 million” from the EUR 1.2 billion euro sale of its Mexican packaging arm Empaque in February 2015.