Bad news for hop lovers, it will cost more to enjoy your favorite “little fret” by the end of 2022.
Posted at 6:00 a.m.
Molson Coors has announced a further 3-5% price increase for its products in the United States by the end of 2022. And everything indicates that Canadian consumers will not be spared.
“I’m not used to giving indications of upcoming price increases in Canada. But it is clear that inflation has an impact on our costs and it is inevitable that this will be reflected in the price at the consumer level”, said Frederic Landtmeters, president of Molson Coors Canada, in an interview with The Press.
Inflation was 8.1% in June and the Bank of Canada expects it to remain around 8% in the third quarter of 2022.
This will be a second price increase. At the beginning of the year, Molson Coors had raised its prices by 4 to 5% in the United States. The Canadian Division had followed suit.
PHOTO MARTIN CHAMBERLAND, ARCHIVES LA PRESSE
Frederic Landmeters, President of Molson Coors Canada
The price of beer has increased this year. In Canada, as in the United States, we have seen inflation exceed the 2% target by 2021. We have started to implement price increases, as we see everywhere in the economy. The increases were put in place to compensate for inflation in our costs.
Frederic Landmeters, President of Molson Coors Canada
Mr. Landtmeters pointed out that price increases in the beer category have not yet matched the rate of inflation seen in Canada.
Second-quarter 2022 results, released Tuesday, showed sales stagnated at US$2.9 billion through April, May and June (down 0.6%). Pre-tax profit fell 88% to US$47.3 million.
Inflation, the residual effect of the abandonment of certain economy brands in the United States and the 11-week strike at the brewery in the borough of Saint-Hubert, in Longueuil, largely explain these gloomy results.
Stock up
Investors sanctioned the company, with the stock losing 6% of its value on Tuesday to US$53.49. It must be said that the action of Molson Coors (TAP in New York) was then up 22% since the beginning of the year, a performance worthy of mention in a bear market, the S&P 500 index being down 13% since 1er January. On Friday, TAP ended the session at US$54.07, up 2.19%.
Molson Coors also maintains its forecast for 2022: sales up around 5%, an increase in pre-tax profit of the same order, and free cash flow (free cash flow) of around US$1 billion over the year as a whole.
“For Canada, we were on a really positive trajectory in terms of revenue growth and, frankly, even if the labor dispute in Longueuil put our momentum on hold, I am very hopeful that we will get back to it. and that we are already getting back to it six weeks after the end of the labor dispute,” indicated the president of Molson Coors Canada.
Davies vs. De Bruyne
The sector of alcoholic sparkling waters and other new malt-based beverages continues to fulfill its promise.
“Two weeks ago, I saw that our Vizzy brand had become number one at Couche-Tard in Quebec,” said Mr. Landtmeters. We focused on the Vizzy and Coors Seltzer brands, two brands in the top 10. Today, we added a third with Topo Chico in English Canada. I plan to launch it on the Quebec market by the end of 2023 probably. »
Molson foresees a better fourth quarter compared to that of 2021 which had suffered from the closure of bars and restaurants. There is also the Soccer World Cup which will take place during this period. “Typically, November is not a big month for selling beer,” notes the boss from the flat country of Stromae.
Mr. Landtmeters has already marked November 23 on his calendar, the day of the meeting between the teams from his two home ports: Canada and Belgium.