Heineken looks east for growth after sales miss

HEINEKEN said weak sales in Europe had led to it missing profit forecasts in the first half of the year, underlying the brewer’s need to complete its deal for Tiger beer maker Asia Pacific Breweries (APB).

The Dutch drinks firm – the third biggest in the world – said profit after tax fell four per cent when one-off sales were stripped out. The amount of beer Heineken sold in western Europe – where the firm makes over 45 per cent of its turnover – fell by 0.8 per cent, although growth in the Asia Pacific region was 7.6 per cent. Brewers and pub chains have struggled in the UK and western Europe as poor weather and economic troubles have hit beer sales.

Heineken agreed a deal over the weekend to grab a majority stake in APB, buying 40 per cent from Fraser and Neave to add to Heineken’s 42 per cent share. The deal now has to be approved by shareholders, and could still face competition from ThaiBev, which is also looking to invest in the Singapore-based brewer of Tiger and several other beers.

Chief executive Jean-Francois van Boxmeer said the agreement with Fraser and Neave “marks an important and exciting milestone in our acquisition of APB”.

Total revenue at Heineken, which makes Amstel and Strongbow, rose five per cent to €8.8bn (£6.9bn), but this was less than expected and the share price fell almost five per cent in early trading yesterday before recovering slightly.