Heineken expects growth to slow

Dutch brewer Heineken reported a slight dip in half-year profits announced on 27 August 2008 as a result of the cost of its part purchase of UK firm Scottish & Newcastle (S&N).

The cost of the deal meant Heineken’s net profit for the first half of 2008 fell 1.5 percent to EUR 540 million. At the same time, S&N’s sales helped Heineken’s revenues rise by 17.1 percent.

Revenues for the group totalled EUR 6.4 billion, up from EUR 5.5 billion a year earlier.

Heineken has had to face some criticism for buying S&N’s businesses in low- or no-growth mature markets while Carlsberg, Heineken’s partner, gained operations in fast-growing emerging markets like Russia.

"Mature does not mean that it is not profitable, it means it is not growing," Mr van Boxmeer reportedly said, defending his strategy. "The profits can be high and even if you grow at a slower pace you grow in a pie which is bigger."

Unfortunately, the financial markets beg to differ. Heineken shares have lost 30 percent over the past year.