Raw material costs likely to prompt price hike in beers

22 February, 2008

S&N and

Heineken have warned that prices will have to rise as costs for raw materials and utilities spiral.

In its full-year results statement, S&N said its "input costs" - the price of raw materials, packaging and utilities - had gone up 8.5 per cent. Price rises in the UK are likely.

Heineken said

it anticipated a 15 per cent price increase in its raw material and packaging costs. The Dutch brewer said it was confident

costs would be passed on in most markets.

Carlsberg has also warned 2008 will be a challenging year. Chief executive Jĝrgen Buhl Rasmussen said: "The marked increases in raw material prices will make 2008 a challenging year, so it will be more important than ever to focus on value growth in sales and efficiency in the organisation."

Carlsberg described profits as "very satisfactory" following a year which saw its principal UK brands achieve value and volume growth far in excess of the wider take-home beer market.

This week's OLN Brands Report points to an 18 per cent sales uplift for Carlsberg in the British off-trade, while

Carlsberg Export sales climbed 7 per cent. Globally, Carlsberg's operating

profit on its beverage business climbed 25 per cent, thanks to strong performances across Europe.

Heineken's net profits were down

33 per cent, but OLN's Brands Report shows UK sales of Heineken have increased by 17 per cent.

Chief executive Jean-François Boxmeer said: "I am fully confident that, despite the challenges of rising input costs and the uncertain economic outlook in some regions, we will again be strong and ­competitive enough to deliver positive profit growth."

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