Heineken disputes Diageo’s suggestion that beer is losing share to spirits
Heineken has played down claims made by Diageo that the beer category is being cannibalised by the growth of spirits.
Following the announcement of a 24.3% year-on-year hike in first-half sales, Heineken CEO Dolf van den Brink was reportedly asked by CNBC about Diageo chief executive Ivan Menezes’ suggestion last month that the spirits category was seeing a lift thanks to beer and wine drinkers opting for spirits instead.
Quashing the claims, the Heineken boss explained to CNBC’s ‘Squawk Box Europe’ programme that this only happened in isolated cases, but was certainly not the bigger picture.
Debunking the suggestion that beer was being cannibalised by spirits, van den Brink said: “No, we don’t see that. We see it sometimes market by market – the US follows that pattern.”
He reiterated: “Globally, we don’t see that and we don’t believe that to be true. We see very strong growth across all our key markets in the Asia-Pacific region, in the Africa region, South America and also here in Europe”.
In contrast to Menezes’ recent observations on the category, van den Brink insisted “we’re seeing very healthy growth trends, also driven by people really going out again – our on-trade volumes in Europe, for example, were 70% up.” and added: “People want to go out, people want to enjoy having a beer again and tourism is picking up. We remain very optimistic about the prospects for the beer category.”
Responding to the statements, a Diageo spokesperson said: “Total Beverage Alcohol, or TBA, has grown at a 4.1% CAGR since 2010. Within TBA, the spirits category has grown materially faster, gaining nine points of share and continuing to premiumise during this period. Going forward, we expect spirits to continue to win share from beer and wine and for the premiumisation trends to continue. We are well positioned to respond to these trends and to continue to grow our business and gain market share, as you can see in our recent full year results.”