Frothy profits at Heineken

The economy might be in dire straits but Brits still love a pint down the pub.

Heineken said today it has grabbed market share in the UK with the brand growing 14% in the year. The group is optimistic that business will be boosted by events such as Euro 2012, the Queen's Jubilee and the Olympics.

Heineken, the world's third-largest brewer and the official beer sponsor of the Olympics, owns 1380 British pubs after buying 918 from Royal Bank of Scotland last year.

Chief financial officer Rene Hooft Graafland said: "The British pub has a great future. It is a great place to be. There has been a shake-out and many of the weak performers have gone. There is of course a shift in habits to off-premises drinking but this is happening everywhere, not just the UK.

"But the good pubs, those with good food, a good location and good guys behind the bar and, of course with the best Heineken beer, will succeed."
Heineken, which also owns Amstel, Desperados and Strongbow cider, said 2011 net profit before one-offs had risen 9.2% to 1.58 billion (£1.32 billion), ahead of forecasts.

But Brits will have to start paying more for their pint this year - beer prices are set to rocket globally. Heineken estimates a 6% increase in costs per hectolitre, reflecting the rising price of malted barley.

Hooft Graafland said: "We have to pass this on to the consumer so you will see prices rising."

Heineken has launched another round of cost savings. This time with plans to cut 500 million. But rather than further brewery closures this time it will be effected through "synergies" such as one global buying office rather than separate buyers for each region.

The Europe is still a growing market for the beer brand but it is focusing its investment on emerging markets such as Asia, Africa and Latin America.

Putting the beer to one side, Heineken is set to take cider global. It already sells Strongbow Gold to markets where Brits take their holidays but it is now planning to take it to Italy, the Netherlands and South Africa.

Hooft Graafland said: "We are exploring markets in central and Eastern Europe, on top of the popular British tourist destinations to sell Strongbow Gold."