Heineken prepares for high packaging costs in 2009

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BELGIUM - Dutch brewer Heineken NV expects an increase in packaging cost this year even as prices stabilize, said its chief executive.

According to Jean-Francois van Boxmeer, chief executive, Heineken, the brewer expects a like-for-like increase in input costs this year for packaging and agricultural produce.

Speaking to Reuters on the sidelines of a business summit in Brussels, Boxmeer said, "Packaging has gone up again for 2009 because of delaying effects."

This is because suppliers have not immediately passed on the effects of spikes in the price of oil and commodities such as aluminium for cans experienced in 2008, he explained, adding that Heineken also expects costs for agricultural items such as barley to be similar to those of last year.

In 2008, Heineken had to deal with a like-for-like increase of input costs in 2008 of 18%, of which 15% was due to higher purchasing prices and 3% due to volumes and changes in the packaging mix.

While declining to predict input prices for 2009, Bowmeer commented, "We are confident, but the harvest has yet to come.”